The French club have had their relegation to Ligue 2 overturned allowing them to compete in Uefa's second-tier tournament
Crystal Palace’s hopes of playing in the Europa League next season have been dealt a significant blow after Lyon’s relegation to Ligue 2 for breaching financial rules was overturned.
The i Paper reported on 30 June that Palace faced expulsion from the Europa League if Lyon’s appeal was successful, an outcome that has now been confirmed by the French Football Federation.
Lyon had agreed to drop out of European competition if the French football watchdog, the National Directorate of Management Control (DNCG), upheld their relegation.
An official Uefa decision on Palace’s fate is expected this week, but Lyon’s reprieve looks likely to demote Palace to the Conference League, Europe’s third-tier tournament.
Nottingham Forest, who qualified for the Conference League after finishing 7th in the Premier League, could stand to benefit by taking Palace’s place in the Europa League.
The Eagles automatically qualified for the Europa League by winning the FA Cup in May – the club’s first major trophy in 118 years – beating Manchester City 1-0 at Wembley.
Palace haven’t competed in a European competition of any description since 1998, when they lost 4-0 on aggregate to Turkish club Samsunspor in the first round of the Intertoto Cup.
However, their place in the Europa League has been in jeopardy while Uefa has conducted an investigation into whether or not they breached its multi-club ownership rules.
American billionaire John Textor’s Eagles Holding Limited has significant stakes in both Palace and Lyon, who also qualified for the Europa League after finishing 6th in Ligue 1.
Clubs with the same owners are not allowed to compete in the same European competition.
Textor sold his 43 per cent stake in Palace to New York Jets and Johnson & Johnson pharmaceutical heir Woody Johnson last month, as Palace sought to prove their innocence.
The 59-year-old also stepped down from his role at Lyon last week. The seven-time French champions were provisionally relegated in November after amassing debts up to £200m.
Palace argued that Textor’s influence at the club was limited due to the four-way voting requirement of their four owners, which includes chairman Steve Parish, and American investors Josh Harris and David Blitzer.
The club are expected to lodge an appeal to the Court of Arbitration for Sport should they be expelled from the Europa League.
It has been reported that Palace should be able to play in the Conference League despite Blitzer’s involvement with Danish club Brondby, who have also qualified.
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A Lyon statement read: “Olympique Lyonnais welcomes today’s decision from the DNCG which restores our position in Ligue 1 and is grateful that the appeal commission recognises the ambition of the Club’s new management to ensure a professionalised administration of its affairs going forward.
“The new management, aided by the commitment and dedication of our shareholders and lenders, is extremely grateful for all the support it has received from inside and outside the Club, including from fans, staff, players, partners and elected officials.
“Today’s decision is the first step in restoring confidence in Olympique Lyonnais and we now return our focus to creating success on the pitch, ready for next season.”