Europa League Dream Turns Sour for Palace Amid UEFA Ownership Rules

Crystal Palace’s historic FA Cup triumph over Manchester City at Wembley – their first-ever major title – was meant to mark the start of a new era. It was a story of underdogs defying the odds, culminating in wild celebrations and a place in next season’s Europa League.

But less than two months on, that fairytale has unravelled. Palace have been bumped down to the Europa Conference League following a ruling by UEFA over multi-club ownership rules. Nottingham Forest, who initially missed out on European qualification, will now take Palace’s place in the more prestigious competition.

Palace are preparing to challenge the decision at the Court of Arbitration for Sport, but the controversy has sparked wider debate around ownership structures in modern football — and may have ignited a fresh rivalry between two Premier League clubs.

The Ownership Web and Missed Deadline

At the centre of the controversy is American investor John Textor, who holds a 43% stake in Palace via Eagle Football Holdings. He also owns French club Lyon, who qualified for the Europa League through their domestic league finish.

UEFA regulations prohibit clubs under shared ownership from competing in the same European competition if the owner is deemed to have significant influence over both. Palace argued that Textor doesn’t have decisive control at Selhurst Park and therefore should not fall foul of the rules.

Speaking to Talksport, Textor defended his role: “I don’t have decisive influence. I don’t and I didn’t.”

However, UEFA disagreed, ruling that Lyon’s higher league finish gave them priority under the current ownership structure. A crucial factor in UEFA’s decision was Palace’s failure to restructure their ownership before the governing body’s 1 March deadline.

In contrast, Nottingham Forest — also affected by multi-club ownership rules due to Evangelos Marinakis’ ties with Olympiakos — acted in time. Marinakis transferred his Forest shares into a blind trust, temporarily stepping back from control to comply with UEFA guidelines. While Olympiakos made it to the Champions League, Forest’s earlier compliance helped them leapfrog Palace into the Europa League slot.

Had Palace successfully proved Textor lacked controlling influence, the missed deadline may not have mattered. But UEFA rejected their argument, leaving the South London club with limited options.

Forest’s Behind-the-Scenes Involvement

Palace’s camp has raised concerns about Forest’s role in the ruling. According to BBC Sport, Forest submitted a letter to UEFA raising doubts over Palace’s eligibility.

Forest, for their part, argue that they played by the rules and adapted to UEFA’s regulations, even when it meant uncomfortable steps such as placing ownership in a trust. Their stance is that compliance — not sentiment — should determine who earns a European spot.

With Palace feeling wronged and Forest unapologetic, a simmering rivalry could now be on the cards.

Palace’s Attempt to Distance Themselves from Textor

In late June, Textor agreed to sell his Palace shares to American businessman Woody Johnson in a deal worth close to £190 million. The move was seen as a step toward appeasing UEFA and reaffirming that Palace had no ongoing link to Lyon’s affairs.

However, insiders at the club knew this development alone wouldn’t be enough. Their hopes rested on UEFA re-evaluating Textor’s prior level of control — a decision that ultimately didn’t go in their favour.

Lyon’s Reprieve Seals Palace’s Fate

Palace briefly believed the door to the Europa League might reopen when Lyon were relegated from Ligue 1 due to financial issues. Had the decision stood, Lyon would have lost their European licence.

But Lyon swiftly appealed, and with uncertainty swirling around Ligue 1’s domestic broadcast revenues following DAZN’s contract withdrawal, there was little appetite in France to demote one of its flagship clubs. French football authorities later upheld Lyon’s appeal, restoring them to the top flight and confirming their Europa League spot.

Palace’s hopes were effectively crushed at that moment.

A Harsh Lesson in Modern Football

For Palace, it’s a painful end to what should have been a landmark year. The switch from Europa League to Conference League represents not only a significant financial hit, but also a blow to the club’s growing profile on the European stage.

The situation exposes the increasingly tangled web of multi-club ownership and raises broader questions about fairness, compliance, and football governance.

Whether Palace’s legal battle brings redemption remains to be seen. For now, the club must settle for lesser rewards — and perhaps begin a new chapter with Forest as their unexpected nemesis.