French club Lyon have been demoted to Ligue 2 because of the poor state of their finances.
The club were provisionally demoted by the DNGC, the body which oversees the accounts of French professional football clubs, in November.
Lyon officials including owner John Textor, met with the DNGC on Tuesday but failed to convince the body that the club had sufficiently improved their financial situation to lift the punishment.
Last October, his Eagle Football Group, which owns a 77% stake in Lyon, announced debts of £422m.
Seven-time French champions Lyon raised around £45m with the sales of Maxence Caqueret to Como in January and Rayan Cherki to Manchester City in June in an attempt to improve their finances.
High earners such as Alexandre Lacazette and Anthony Lopes have also been released.
Lyon have the right to appeal against the decision. Should it stand, Lyon will be replaced in the top flight by Reims, who were beaten in the relegation play-off by Metz.
Only five teams have lifted more French titles than Lyon’s seven, which they won in successive seasons between 2002 and 2008.
The club reached the Champions League semi-finals as recently as 2020 and have not played in the second tier since 1989.
When the provisional punishment was handed down in November, Textor said that there was “no chance” the club would be relegated and reiterated his confidence before Tuesday’s meeting.
“We have made a variety of investments in recent weeks,” he said. “Everything is good financially.”
Textor is also the largest shareholder of Brazilian club Botafogo and co-owner of Premier League club Crystal Palace, though he agreed a deal to sell his 46% stake in the Eagles on Monday.
Palace qualified for the Europa League by winning the FA Cup but their place is in doubt because Lyon also qualified by finishing sixth in Ligue 1.
Textor’s perceived involvement with both clubs could be in breach Uefa rules, which prevent multiple teams under one multi-club ownership structure competing in the same European competition.
The Eagles hope Textor’s decision to sell his stake to New York Jets owner Woody Johnson will avoid that scenario.
Last year, six-time Ligue 1 champions Bordeaux had to surrender their professional status after being relegated from Ligue 2 to the French fourth tier because of bankruptcy.
