Chelsea and Man Utd RELEGATED? What if the rules that relegated Lyon were used in the Premier League?

Lyon have caught the headlines following their shocking relegation from Ligue 1 due to financial problems – but what would happen if these rules were applied in the Premier League?

French football has been rocked by the news that Lyon are set to play in the second tier after being relegated because of the club’s finances.

Beyond broad concerns over their economic situation, it’s unclear exactly why OL, who are due to play in the Europa League next season, find themselves in this position. Once this has been made apparent, the club will have seven days to file an appeal, with optimism prevailing that the situation can yet be turned around.

But this harsh punishment has led to many fans reflecting on what might happen if a French-style watchdog were put in charge of the finances of Premier League clubs.

The DNGC is an organisation in France whose role is to monitor the financial position of clubs, ensuring that they are viable in the long term. Substantial losses are, therefore, frowned upon and punishments can be severe: transfer bans or administrative relegation is often implemented.

As the cases of Lyon this summer and Bordeaux last year prove, not even the historical giants of Ligue 1 are safe from scrutiny. Bordeaux were plunged into the fourth tier of the French game by the authorities and were unable to bounce back immediately, despite recruiting Andy Carroll.

This has not been without controversy. Nearly half of the 174 teams (80) across France’s professional pyramid are under some form of financial sanction, and while this is a reflection of the financial crisis hitting the game, the DNGC has been accused of an overzealous approach that is playing its part in killing the French league.

So with all this in mind, which Premier League teams would have the greatest cause for concern?

Chelsea

Chelsea would be a club under immediate pressure. Indeed, some of the strategies that Lyon owner John Textor has used to plead his case to the DNGC closely mirror those that have been successful by compatriot Todd Boehly in West London.

For example, Boehly sold Chelsea Women to a sister company for around €230 million, having infamously done likewise with a hotel previously. This would be immediately shot down in France. The DNGC, which is reportedly refusing to accept Lyon’s valuation for their women’s side, takes a dim view of internal transactions.

On top of this, Chelsea’s transfer spending would be deemed excessive while the creative accountancy processes that Boehly has employed are unlikely to pass muster in France.

VERDICT: Could well face relegation under French FFP laws. Would certainly have spending drastically cut.

Everton

Everton’s finances have been in bits for years, with the Merseyside club racking up astronomical debts before being taken over by the Friedkin Group.

Strategies have been put in place to ease the issues ahead of the club’s long-awaited stadium move, with the ownership laying the groundwork for a more secure long-term future.

Notably, the refinancing agreement on the new ground has seen interest payments slashed by around €60m per year, while wage-to-turnover ratio and loss reduction both have dropped significantly in the latest accounts.

VERDICT: Already punished under the Premier League’s much looser financial code with points deductions, Everton would almost certainly have been relegated under France’s laws. Now under new ownership, a fresh structure would be heavily scrutinised but it seems likely to pass any examination.

Manchester City

City’s case is an interesting one and, in many ways, reflects PSG’s financial position in Ligue 1. The DNGC seeks to prevent issues arising due to financial mismanagement, and given the financial backing of Abu Dhabi towards the Etihad club, they would likely be able to spend big, just as PSG have done under Qatari ownership in recent years.

The key difference is the 115 outstanding charges on Pep Guardiola’s side. This issue would not have been allowed to drag on in Ligue 1, with immediate sanctions imposed. Just what these would be depends on the evidence presented.

VERDICT: If City were a French team, there would be no cause to manipulate their finances, as they stand accused in the Premier League, so the 115 charges are a moot point. No issues here.

Manchester United

Man Utd’s high level of debt under the Glazers became infamous and would certainly have triggered concern in France.

Initially, this model might have escaped serious problems, yet as United’s failures on the field mounted, sparking significant losses with high wages and colossal debt servicing, there’s little doubt the Old Trafford side would be in trouble.

Since being taken over by Ineos, at least in a minority fashion, things do not seem to have improved. Indeed, the only way that United are dodging punishment for Profit and Sustainability Rules is by use of the company Red Football, according to football finance expert Kieran Maguire.

This satisfies the Premier League, but it is unlikely to come up to French expectations.

VERDICT: United could have a real issues if they were measured by the DNGC’s yardstick. Massive debt exposure, like Lyon are faced with, is the main concern and would almost certainly lead to some kind of sanction. The club’s money-making power would likely mean it would avoid relegation, but a transfer ban or likelier budget constraints are a likely outcome.

Nottingham Forest

On the field, Forest were one of the Premier League’s success stories last season as they pushed for the Champions League, yet their big spending and relatively modest revenues would be frowned upon in France.

The DNGC seeks to stop problems before they arise, and to that end Forest would be put under pressure, especially after being docked points the previous season.

VERDICT: In France, Forest’s model would almost certainly be seen as structurally unsound. As such, budget constraints are the likely outcome, but relegation would also be possible.