The financial turmoil in the French Ligue 1 has reached a negative climax. On Tuesday, 24 June, it was announced that Olympique Lyonnais would be forced out of the competition.
By November last year, Lyon had accumulated debts totalling €500 million. Due to the club’s financial situation, the French professional football supervisory body DNCG (Direction Nationale du Contrôle de Gestion) announced on Tuesday evening that it would be forced to relegate the club.
The club’s owner, John Textor, recently expressed confidence in overcoming the difficulties. An agreement with creditors was reached in January. The club has also cut salaries in connection with a voluntary redundancy plan for around a hundred employees and the departure of top players such as club icon Alexandre Lacazette. Most recently, top player Ryan Sherkey was sold to Manchester City for a substantial fee.
In its statement, Olympique reacted to this decision with misunderstanding and announced that it would appeal. Many people in France do not understand ‘how an administrative decision can downgrade such a large French club’. The team was able to demonstrate sufficient capital and sporting success.
Why Ligue 1 is in crisis
Two issues are causing financial difficulties in France’s top flight. In 2022, Ligue 1 entered into a deal with private equity firm CVC. The investor paid the league €1.5 billion to mitigate the impact of the coronavirus pandemic, among other things. In return, CVC receives 13 per cent of the league’s marketing revenues – for an unlimited period of time.
Super-rich, oil multinationals and investors are buying football clubs – preferably several at once. This is called ‘multi-club ownership’. Many fans fear the death of football and are organising mass protests.
In France, the situation is also complicated by the television contract, which fell short of the expected revenue of 500 million euros. The LFP league association had hoped for television revenues of around one billion euros for each season.
As a reminder, there were riots in Paris after the Champions League final due to PSG’s victory in the tournament.
