Crystal Palace has been relegated from the Europa League to the Conference League following a judgment by UEFA’s Club Financial Control Agency (CFCB), which found that the Premier League team has significant ties to Lyon.
Like other clubs sidelined this summer, Palace is expected to challenge this decision in the sports arbitration court.
Nottingham Forest, set to compete in next month’s Conference League playoffs, will now take Palace’s spot in the Europa League amidst this CAS appeal.
Palace’s participation in the league stage isn’t guaranteed, as they must first qualify, but the financial incentives for playing in the Europa League are notably higher.
Palace secured a place in the Europa League by defeating Manchester City in the FA Cup final, yet Lyon’s subsequent victory in the Coup de France a week later led to their promotion to the Europa League, pushing Palace down.
This situation has raised alarms regarding UEFA’s multi-club ownership regulations, which prohibit individuals with significant stakes in multiple clubs competing in the same tournament.
John Text, who owns 77% of Lyon and 43.9% of Crystal Palace, has stirred controversy under these rules. Although UEFA’s guidelines are strict about holding stakes above 30%, Palace contends that Text is not involved in the management of their club.
Last month, Palace announced that Woody Johnson, co-owner of the New York Jets, had entered a binding agreement to purchase Text’s stake in the team, pending Premier League approval.
According to the multi-club ownership (MCO) rules, clubs finishing higher should qualify for European competition, yet Palace (12th place FA Cup winners) and Lyon (6th place) were both affected by these regulatory complications, although individual league standings typically determine qualifications.
This contradicts the Europa League rules that place Cup winners above league finishers in priority.
The situation became even more complex when Lyon faced relegation to League Two due to financial struggles but later overturned this decision, ensuring their place in the Europa League and leaving the MCO concerns with UEFA.
A separate ownership conflict between Palace and Danish club Brøndby involving David Blitzer was cleared by the CFCB, allowing Palace to enter the Conference League playoff round.
Last year, UEFA permitted Girona to participate in the Champions League alongside fellow City Football Group member Manchester City. Manchester United was also allowed to compete with Ineos, overseen by Jim Ratcliffe, irrespective of Ineos’ involvement with Nice.
UEFA has permitted four clubs to enter a “Blind Trust,” ensuring no overlapping management between clubs and halting transfers for 18 months. However, the organization has indicated that this may not be a sustainable long-term solution, with the deadline for adhering to financial regulations moved from June 1 to March 1 this season.
Historically, clubs have not been expelled from European competitions due to MCO regulations, but Palace now finds itself among those impacted by stricter enforcement.
Drogheda United in Ireland faced setbacks in the Conference League due to ownership issues with Danish club Silkeborg, and Hungary’s Giriét entered the Conference League with FC DAC 1904 Dunajská Streda.
Drogheda won the Fai Cup in November and contended for the Irish League in a calendar format, but they were unable to participate in the Conference League until after the new MCO deadline. They appealed to CAS but were unsuccessful.
Both Palace and Drogheda argue that it is unjust to impose such restrictions on clubs that are not typically vying for European positions.
With the March 1 deadline approaching, Palace had yet to compete in the fifth round of the FA Cup. Drogheda, who ended up 9th, was aware of their European prospects, while Silkeborg (7th) seemed less likely to qualify, only aiming for European playoffs after finishing atop the relegation group.
At the time, FC DAC 1904 Dunajská Streda had not emerged in the lawsuit discussion.
Earlier this year, Club Leon was removed from the FIFA Club World Cup due to ownership conflicts with another Mexican club, Pachuca, indicating a shift in how regulators view MCO issues.
This report incorporates information from Reuters.
Fan Take: This situation underscores the growing scrutiny on club ownership and regulations in soccer, highlighting how financial ties can impact team opportunities in European competitions. For fans, this could signal a shift in how clubs are managed, possibly leading to a more level playing field in football.
