Lyon are facing expulsion from Uefa competition next season over concerns that the French club have not complied with the terms of a settlement with the European governing body last summer.
In serious financial difficulties over the collapse of their previous controlling power, Lyon are fourth in Ligue 1, one place outside the automatic Champions League qualifying places and one point behind Lille with one game to play.
A win in their final game of the season against Lens on Sunday would, at the very least, secure them a place in the Champions League qualifiers, and could potentially send them straight into the league phase.
Lyon are guaranteed at least a spot in the Conference League and are well set for the Europa League if they do not make Uefa’s top competition. But for the club to be licensed in Uefa competition they would first have to demonstrate that they had complied with Uefa’s sanctions.
Last July, Uefa’s Club Financial Control Body (CFCB) announced sanctions against Lyon, as well as Chelsea and Aston Villa, among others, for breaking financial sustainability regulations. The CFCB laid out a scale of penalties if the clubs were not able to comply with certain conditions over the next four years.
Among the covenants was the requirement for Lyon’s ownership to inject €60m by July 15 last year and for that to be converted into equity by October 15. It is understood that measure has not been fulfilled by Lyon, although how far short the club might have fallen is likely to determine the severity of the punishment. Uefa is generally reluctant to eject clubs from its competitions, but would have to act if Lyon were not close to the target.
The club are in financial turmoil and announced further losses this week of €186m for the second half of last year alone. Lyon are now controlled by the US investor Michele Kang, the club’s president, and Ares Management, the principal creditor to the US investor John Textor, who previously owned Lyon. The former Lyon president, and Crystal Palace shareholder, has seen his attempts to create a multi-club ownership (MCO) group, Eagle Football, collapse in huge losses, towering debts and major recriminations.
Kang and Ares’s company, Eagle Football Group (EFG), claims that much of the losses were generated by agreements that it alleged Textor had entered into with other clubs in his original MCO network, Botafogo of Brazil and RWD Molenbeek in Belgium. Lyon said in a statement: “These guarantees were unknown and had not been reported in the company’s financial statements published in recent years.”
The club may hope that these off-books transactions that they allege, as well as EFG’s new programme of austerity will persuade Uefa to be more lenient when imposing any sanctions. The club are effectively listening to offers for any and all of their players, according to those with knowledge of their transfer dealings.
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