The reason for this decision lies in the ownership structure of both teams. Crystal Palace co-owner John Textor also has a majority stake in Lyon. According to UEFA rules, teams with the same ownership cannot compete in the same competition. As a result, Crystal Palace is likely to be demoted to the Conference League.

The deadline to change their ownership structures to comply with UEFA rules was in March 2025. Unfortunately, Crystal Palace missed this deadline. To participate in the Europa League, they must pay a significant fine of €50M, plus a €12.5M fine for non-compliance with UEFA's income and expenditure controls. If Lyon cannot afford these fees, Palace will remain in the Europa League and may challenge the decision in court.

Crystal Palace is now facing a difficult situation. They will have to decide whether to pay the fine and continue in the Europa League or accept their demotion to the Conference League. The club's management will need to carefully consider their options and make a decision that is best for the team.

It is worth noting that UEFA's multi-club ownership rules aim to ensure the integrity of club competitions. These rules are in place to prevent teams with the same ownership from competing against each other.