Hours after Olympique Lyonnais was barred from signing players and provisionally demoted to the second tier of French football due to its financial difficulties, owner John Textor sought to reassure fans that all was well.
“This is not a club in trouble”, the American entrepreneur said at a press conference, pointing to a range of planned fundraising initiatives from across his network of football clubs.
“Whatever was broken about our finances has already been fixed, and we don’t need help,” Textor insisted, as one of the biggest clubs in France was embroiled in a fight with national regulators that is testing the limits of the multiclub model now pervasive across football.
More than 300 teams globally, including 13 per cent of those overseen by Uefa, are now part of such multiclub groups, according to figures from the organisation, which governs the sport in Europe. There were fewer than 40 in 2012.
The multiclub template has been adopted by owners including by Abu Dhabi-owned City Football Group, which became a major investor in European football when it bought current English champions Manchester City in 2008.
Austrian energy drinks brand Red Bull, owner of New York Red Bulls in the US’s Major League Soccer, is another proponent of a model that groups together clubs in different countries to create a single platform for spotting, developing and transferring players.
But the model has prompted protests from some fans who fear the loss of their clubs’ independence and increased scrutiny from regulators who are concerned it could compromise the game’s integrity.
“Football is sleepwalking into a crisis. Nobody seems to be thinking about the long-term risks of multiclub ownership”, said Ronan Evain, head of Football Supporters Europe, an umbrella group representing fans.
Textor’s words last week came in response to sanctions meted out by the Direction Nationale du Contrôle de Gestion, which regulates the finances of French football.
The body had raised concerns about the club’s high levels of debt, which reached €505mn, according to Lyon’s annual results released earlier this month. The club had €361mn in revenue in the 12 months ended June 30, when it recorded a net loss of €25mn.
The Florida-based businessman is confident that his cash raising measures
will fix the problems at Lyon. These include a planned stock market flotation of Eagle in New York, offloading his minority stake in English Premier League club Crystal Palace, and player sales at Lyon and the other clubs that Eagle owns in Brazil and Belgium.
“As a global organisation, we have a very deep set of tools as to how we solve the problems here in France,” Textor said.
But Lyon’s local auditor and the DNCG do not share that view. The auditor said earlier this month that it was considering issuing a qualified opinion on the club’s accounts because it lacked visibility on the planned fundraising activities being conducted by the parent company.
Lawmakers and governing bodies are also paying increased attention to the network approach. In a report last month, French senators Laurent Lafon and Michel Savin wrote that multiclub ownership risked “compromising” results on the pitch and creating “distortions” in the transfer market, due to player trades between clubs within the wider group.
“Clubs contribute to the economic vitality of our territories and their identity. They must remain at the centre of an ecosystem that is above all local,” the French senate report said.
Lyon is one of 10 Ligue 1 clubs owned as part of a wider group, equating to more than half of the 18-strong French top-flight. Private equity firm Clearlake Capital and American financier Todd Boehly, who also own west London side Chelsea FC, bought RC Strasbourg in 2022, while Toulouse FC is owned by AC Milan owner RedBird.
Uefa warned last year that multiclub ownerships posed a threat to the “integrity” of competitions due to the “growing risk of seeing two clubs with the same owner or investor facing each other on the pitch”.
Meanwhile the potential dangers of the network model were laid bare earlier this year, when the financial woes of Miami-based 777 Partners, which owned French side Red Star, plunged the five clubs it had bought into uncertainty. The group agreed a deal to buy English Premier League club Everton late last year, but failed to gain regulatory approval.
The disagreement between Textor and the DNCG hinges on whether Eagle’s other clubs are relevant to the financial picture at Lyon. Textor believes they are, arguing that players at his other clubs — Botafogo and RWD Molenbeek — are in effect shared assets, and any cash generated from sales can be pooled.
Botafogo is currently top of the table in Brazil with just four games to go, and has reached the final of the Copa Libertadores, South America’s equivalent to the Champions League. That success, he argues, will feed through to high transfer fees for his players.
“The incredible luxury we have of being a multiclub, global organisation gives us the ability to balance cash flows across all of our corporations,” Textor said.
Textor bought Lyon in 2022 for roughly €900mn, including debt, making it the second highest price paid for a European club outside England. He has since sold club assets, including the LDLC Arena and a majority stake in Lyon’s women’s team, and refinanced hundreds of millions of euros of stadium debt through a bond issue.
This week Eagle said outside investors had committed $40mn of pre-IPO funding, part of its planned $1.1bn capital raise. But much of the proceeds due from the exercise have been earmarked to pay down debts owed to US investment group Ares Management, which financed the Lyon takeover.
For now, Textor remains optimistic about Lyon’s fate.
“I’m telling you, we’re not getting relegated. We have resources that go way beyond the needs of this club”, he said. “Our shareholders [won’t] let this club fail financially.”
