Lyon’s financial issues have seen them relegated to Ligue 2 and though Manchester City are alleged to have breached financial issues themselves, their case is very different.
Despite finishing sixth in France’s top division, a meeting held on Tuesday saw the decision made by the Direction Nationale du Controle de Gestion (DNCG). Lyon do hold the right to appeal their relegation from Ligue 1.
Man City meanwhile, find themselves involved in an unprecedented case, whereby they are accused of up to 130 charges. A final decision is not expected for some time, with other matters involving the Premier League over associated party transaction rules ongoing.
Arsenal and other English clubs are waiting for the outcome of their financial wrongdoing case and alongside having to wait for a final verdict, no punishment hints can really be taken from Lyon’s relegation, according to Reach’s Chief Business of Football Writer Dave Powell.
“There is the tendency to look at these things for clues when it comes to what happens with Manchester City, but in reality these are two very different issues that will be dealt with in very different ways.
“The Lyon demotion comes about due to concerns that the DNCG, the body that oversees the accounts and financial practice of professional French football clubs, has over the club’s ability to service its heavy debt, which stands at more than £420m.
“Without Champions League football this coming season, and with a significant payroll commitment, the provisional demotion of the club comes about because the DNCG fear that the club would risk the structure of Ligue 1 next season in the financial situation that they find themselves in, suggesting that they believe there is genuine potential for the club to default, which which could force the hand of the LFP, the governing body of French football’s top tier, to act during a season.
“It may be a tactic to force Lyon to act and cut their cloth accordingly straightaway, with the exits of Rayan Cherki to Manchester City for an initial £30.5m fee, and high earners such as Alexandre Lacazette released already seeing the club trimming the playing squad.
“The DNCG’s issue is about protecting the top tier of French football from a potential issue further down the line, and putting pressure on Lyon to act. Manchester City’s is a legal case where evidence has been presented, arguments on both sides made, and where a decision will be independently handed down based on the representations.
“City’s case is around historical breaches of financial regulation that were in place, while Lyon’s is around operational mismanagement that has allowed them to rack up debt that the DNCG believe poses a threat to the club’s future and Ligue 1’s integrity.
“There isn’t much that can be read into Lyon’s situation and it doesn’t offer up any clues. Whether or not City are exonerated, get a slap on the wrist, or are faced with something more serious will be determined by a legal framework.
“In terms of a timescale, it would be fair to assume that it’s in the best interests of all parties to reach a conclusion before a new season kicks in, but that is by no means a given, and despite suggestions in some corners of the media that a decision is close, the reality is that we still could be some way off, and with the potential to appeal any decisions from both sides, it will run even longer.
“The fact that City have continued to spend has shown it to be a case of business as usual, and that is to be entirely expected. It does point to confidence on the City side that they will be cleared, but it would be folly to have stopped investing in the team until such time as they knew the outcome as they would have lost major ground competitively.”
