French top-tier football club Olympique Lyonnais is facing a $63 million legal claim to pay back debt linked to the transfer of Brazilian star Igor Jesus, putting yet more scrutiny on the team’s finances and ownership structure.
A subsidiary of private credit lender MC Credit Partners LP filed a lawsuit in London in February, covering principal debt of $43.1 million, as well as $6.5 million default fees and an unpaid interest bill running at 10% a month, according to a court document seen by Bloomberg.
The Ligue 1 team is being sued by PRPF LLC following a restructured transfer deal for Jesus from Lyon’s sister club in Brazil, Botafogo, after it missed paying the first financial installment last November. Both sides are owned by Eagle Football Holdings, founded by US businessman John Textor.
The claim underscores the challenges facing regulators and lenders at a time when investors are setting up multiclub entities, which treat players as collateral and trade them between their different teams. Eagle Football is already fighting its largest creditor, Ares Management Corp., in the wake of continued financial losses.
“Such a high profile and large default by Olympique Lyonnais on its obligation to pay transfer monies will inevitably cause lenders pause for thought if operating in the transfer receivables market,” said Philip Scott, a partner at law firm Walker Morris.
The lawsuit also shines a spotlight on Lyon’s balance sheet after the club was nearly relegated because of financial losses and high debt. South Korea-born businesswoman Michele Kang replaced Textor as Lyon’s president last summer, helping the team deal with the threat of demotion from the regulator.
Representatives for MCCP, Textor and Lyon declined to comment on the case.
Sticky Transfer
According to the claim, Lyon and Botafogo entered into a transfer agreement for the player in October 2024, totaling €35 million in two installments. The first installment should have been paid two days after the execution of the agreement, but it didn’t happen.
Shortly after, as Botafogo was trying to raise capital, it approached PRPF for factoring the sums due from Lyon. The agreement was restructured in December 2024 and Lyon agreed to pay $43.1 million across three equal yearly installments through 2027.
The Brazilian club then transferred its right to receive the payments from Lyon to PRPF, and Lyon acknowledged it would have to make the payments to the credit fund, PRPF lawyers said in the document.
Jesus was first set to be transferred to Lyon but his transfer was blocked by the French football regulator because of a club-wide transfer ban at the time. He has since been sold to Premier League side Nottingham Forest.
The transaction also illustrates how the receivables finance market — linked to player transfers or broadcast income — has grown quickly within the football industry, which has traditionally been viewed as a risky market for lenders due to its financial instability.
PRPF is now seeking to recover the full amount after Lyon missed the first payment due in November and failed to fix the default within a 30-day grace period, according to the document.
Lyon’s solicitors wrote in January that they would endeavor to respond to PRPF’s challenge by Feb. 26, but PRPF countered that there was “no reasonable basis requiring 6 weeks or more to respond to a simple debt claim.”
Photograph: Soccer player Igor Jesus; photo credit: Burak Basturk/AFP/Getty Images
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