What Lyon's financial crisis tells us about the future of Crystal Palace & Everton

Last week, Lyon – one of the traditional giants of French football – were provisionally relegated from Ligue 1. If the club that dominated the domestic game in France in the 2000s cannot deal with a large portion of its staggering debts by the end of the campaign, then they will spend next season in the second tier regardless of their final league position. It’s a potential disaster for a proud club, but one which could have knock-on effects across the global game due to their ownership model – and could affect Crystal Palace, as well.

Lyon are owned by American businessman John Textor through his Eagle Football Holdings company – a global ownership group which is also the majority shareholder in Brazilian side Botafogo and Belgium outfit RWD Molenbeek, and which holds a 45% stake in Palace.

Textor also recently entered negotiations to buy Everton from Farhad Moshiri, a bid which was unsuccessful as Textor was unable to offload his Palace shares. Instead, Everton are close to a takeover by another American businessman, Dan Friedkin, via his own investment company, which also owns AS Roma.

Lyon’s situation isn’t only a dire concern for their own supporters, but shines a light on concerns about multi-club ownership more broadly, and may worry many Crystal Palace fans concerned about the potential impact on their team.

The future of Crystal Palace and Lyon

Lyon are currently a staggering €505m (£420m) in debt, a figure exacerbated by summer transfer deals estimated at a net spend of a little under €110m (£91.6m), according to Transfermarkt’s figures. Fortunately, the club do not need to cover the entirety of that amount to have their relegation overturned – Textor told the media that he needs to find around €100m (£83.1m) to satisfy the National Directorate of Management Control (DNCG), which handed the provisional relegation down on Monday.

Textor himself has said that the “imminent” sale of his stake in Crystal Palace will cover this. After an attempt to win a controlling stake in the club failed, Textor has been trying to sell his shares for some time but claimed that despite receiving four offers, he had decided to hold firm for an improved price.

The crisis at Lyon could expedite the sale by forcing Textor to accept a lower valuation, which will open Palace up to new investors – which, as always in football, is just as likely to be a bad thing as a good one. In the meantime, it is unlikely that Textor will make any further investments in the club, although does not represent a change given his apparent determination to sell his holdings anyway.

Should Textor not find a suitable purchaser for his shares in Palace, he has other avenues to find the required funds for Lyon. Selling players is one option, of course, and a fire sale of assets such as Rayan Cherki and Georges Mikautadze could deal with the deficit. Otherwise, Textor will have to turn to Botafogo and Molenbeek to make ends meet.

Eagle Football Holdings has been more aggressive than most multi-club ownership groups when it comes to exploiting the opportunity to move money and assets quickly between the different clubs involved. A fine example is the recent transfer of Ernest Nuamah, a Ghanaian prospect who came through the Right To Dream academy programme and who was officially signed by Molenbeek for a fee of around €30m (£25m) before being instantly loaned to Lyon, with a purchase option of the same amount.

Elsewhere, Botafogo have spent enormous sums by the standards of the Brasileirão, including €19.5m (£16.2m) on Thiago Almada from American side Atlanta. It has served them well so far – Botafogo have reached the final of the Copa Libertadores, which takes place on 30 November.

In short, Textor is not shy about using the full extent of his holdings, and between his attempts to sell his Crystal Palace shares and his likely willingness to move money across to Lyon from other clubs if required, it is not so hard to believe his bullish claims that “there is no chance” that Lyon will be relegated and that “we will have more cash than necessary.”

Furthermore, Sports Pro Media report that Textor intends to float Eagle Football Holdings on the stock market in the first financial quarter of 2025. Ahead of the initial public offering, Textor said there was a plan in place to raise an additional $500m (£400m) “to retire existing senior debt” which included the sale of his Palace holdings.

In the short term, Crystal Palace are unlikely to be directly affected by Lyon’s plight, and Lyon themselves will quite probably avoid an imposed relegation, but the fact that a club in Lyon’s position can fall into such a state of disrepair, with their financial security determined not just by their own incomings and outgoings but by those of several other clubs, is concerning - and sounds yet another warning about the potential dangers of multi-club ownership, a model under which 250 European clubs alone are now believed to be run, including Chelsea, Manchester City and, very soon, Everton.

The dangers of multi-club ownership

The recent downfall of 777 Partners offers us another cautionary tale. The American investment group had interests in seven teams across three continents and also tried to purchase Everton before collapsing amid lawsuits relating to non-payments and accusations of fraud, which were denied.

A pattern of behaviour quickly made itself clear in 777’s investments – teams like Genoa and Hertha Berlin were bought and then had their best players sold for substantial sums, despite which Genoa were handed a points deduction for missing a tax payment. Fans of many of their other teams quickly became concerned by an apparent lack of investment. Vasco da Gama and Standard Liège were among teams that started to struggle on the pitch, and players at the Belgian side stopped getting their pay amid mounting losses.

Eventually, the house of cards came crashing down. 777 was declared bankrupt in October, and one of their former investors, A-CAP, wrote in July to all of the clubs owned by 777 to tell them that they were now under their control. Standard Liège, in a parlous financial position, have been put up for sale. It could so easily have been Everton.

The cautionary tale of 777 Partners is an extreme example, perhaps, but there is a clear threat to clubs that find themselves inside multi-club ownership groups – if the financial situation goes south at one club, it can have significant knock-on effects across the board. Clubs could find themselves stripped of their assets or investment in order to service needs elsewhere.

Everton dodged one bullet but now stare down another barrel, hoping that the Friedkin Group prove to be suitable custodians who can balance the needs of both the Merseyside club and their future Roman stablemates.

It may be observed that even owners who do not invest in multiple teams will often have many investments in other industries, whose own failure could endanger their football clubs, but with multi-club ownerships the ability to transfer players and other assets so directly – to use one club’s money to sign a player for another, as Textor did with Nuamah and as the City Group did with Savinho – surely means that there is a greater risk of direct harm to clubs within such portfolios.

Everton avoided 777’s ownership, and it is unlikely that Textor will be a minority shareholder of Crystal Palace for much longer, and so long as the next owners and investors are worthy of their roles both sides may well flourish and enjoy long-term financial stability. But with clubs in ownership groups hitting financial difficulties across Europe, it’s starting to look like the lack of any regulation of such ownership models could have damaging consequences. Perhaps, next time, it will be a Premier League club.