Crystal Palace set to receive never-before-seen UEFA penalty as decision made on Lyon relegation

Crystal Palace are set to be handed an unprecedented UEFA penalty after Lyon's successful appeal against their relegation from Ligue 1.

French football authorities had demoted Lyon into Ligue 2 due to financial issues, putting their place in the Europa League under threat.

Lyon appealed the decision and on Wednesday, French publication L'Equipe confirmed the club had been successful in their appeal against relegation after a hearing in Paris.

They are now likely keep their place in the Europa League having finished sixth last season prior to their demotion - potentially at Crystal Palace's expense.

The Daily Mail's Mike Keegan claims Palace are now likely to be demoted from the Europa League to the Conference League due to a perceived breach of UEFA's multi-club ownership rules.

Lyon have been handed a reprieve after initially being relegated to Ligue 2 (Image: Getty)

According to a report from The Times, UEFA's official multi-club ownership rules state that teams must meet the eligibility criteria by a deadline of 1 March 2025, nearly four months before Textor's sale.

UEFA regulation states: "To ensure the integrity of the Uefa club competitions, the club must be able to prove that as at 1 March 2025 the… multi-club ownership criteria were met and the club must continue to comply with the criteria from that date until the end of the competition season."

UEFA hold the final call on Palace's destiny and a decision is due to be reached by the end of this week after a ruling was delayed last week pending the outcome of the appeal. The Guardian report that sources have indicated the Club Financial Control Body (CFCB) will decide the Eagles' fate in the coming days.

But the current expectation is that Palace will have to settle for a place in Europe's third-tier competition, something that has never happened before due to the recency of the Conference League, having been established in 2021.

Nottingham Forest could yet earn themselves a spot in the Europa League pending a decision on Crystal Palace. (Image: Getty)

If that were to happen, Nottingham Forest would be primed to take Palace's spot in the Europa League alongside fellow English representatives Aston Villa although Palace would be expected to appeal to the court of arbitration for sport if they are blocked from entering the competition.

Oliver Glasner's side made history last season as they won their first-ever major trophy by beating Manchester City in the FA Cup final and, in doing so, qualified for Europe.

But it was soon reported that the club faced being banned from competing in the Europa League due to the club's shareholder, John Textor, holding a controlling stake in French side Lyon, who had also qualified for the competition.

Textor is now in the process of a sale to New York Jets owner Woody Johnson for £190m ($254m) but that deal is yet to be confirmed officially, and it was claimed last month that Palace could still be kicked out of the tournament.