Crystal Palace have been demoted from the Europa League to the Conference League next season, Uefa have ruled.

The decision stems from Palace breaching multi-club ownership rules as American businessman John Textor owns a stake in the Eagles and is the majority owner of French club Lyon, who have also qualified for the Europa League.

Nottingham Forest, who finished seventh in the Premier League last season, could replace FA Cup winners Palace in the Europa League.

Uefa said the Eagles could appeal its ruling with the Court of Arbitration for Sport and Palace are set to do so.

The rules of European football’s governing body state that clubs owned, to a certain threshold of influence, by the same person or entity cannot compete in the same European competition.

Uefa’s rules set a deadline of 1 March 2025 to show proof of multi-club ownership restructuring – a deadline which Palace missed.

Palace argued Textor does not hold any decisive influence at the club, but Uefa have not accepted the Premier League side’s defence.

Lyon, who also qualified for next season’s Europa League, take precedence over Palace because of their higher league position.

The seven-time French champions finished sixth in Ligue 1, with Palace 12th in the Premier League but qualifying for European competition by winning the FA Cup.

Earlier this week Lyon won their appeal against relegation from Ligue 1 after they were demoted for financial reasons, which affected Palace’s chances of playing in the Europa League.

Had Lyon's relegation been upheld, they had agreed with Uefa to be excluded from the Europa League, clearing the way for Palace to play in the competition.

English football has two allocated Europa League spots, with Aston Villa securing the other after finishing sixth in the Premier League.

Palace were huge underdogs to win the FA Cup and their joy at qualifying for Europe for the first time quickly turned to unease when the club realised their spot may be in doubt.

Uefa’s regulations around multi-club ownership and European competitions are in place to prevent collusion.

In the governing body’s rulebook, a club is required to prove they are not “simultaneously involved in any capacity whatsoever in the management, administration, and/or sporting performance of more than one club participating in a Uefa club competition”.

Textor’s Eagle Football owns a 43% stake in Palace and a 77% stake in Lyon, but the Premier League side argued they are an entity that operates entirely independently.

In June, Forest asked for clarity from Uefa on Palace’s position in Europe with the club standing to gain if Palace were demoted to the Conference League.

Forest owner Evangelos Marinakis, who controls Greek side Olympiakos, avoided regulations around multi-club ownership by diluting his control of the Premier League side.

Textor took similar steps to help Palace’s prospects of playing in the Europa League by agreeing to sell his 43% stake to New York Jets owner Woody Johnson in June, but the deal is yet to be completed.

Textor later also resigned from his leadership position at Lyon.

Uefa decided to delay their decision on Palace’s ruling at the end of June, while the club indicated it would almost certainly launch a legal fight if their Europa League place was revoked. (BBC)