Paris St Germain have been banned from the League Cup next season after some of their fans unfolded an insulting banner during this season's League Cup final, the French League (LFP) said on Wednesday.
PSG, already in the Ligue 1 relegation zone, could have been punished with a points deduction. Instead, they remain on 38 points and 18th in the 20-team top flight.
The capital side refused to comment the decision.
The banner was briefly unfolded after the interval of the final on March 29, which PSG won 2-1 against northern club Racing Lens. It referred to a film about the life of the Ch'tis, a nickname for the people of northern France, which is breaking box offices records in France.
It read: "Paedophiles, unemployed, inbred: welcome chez les Ch'tis."
PSG are level on points with two clubs above them in the table, Lens and Toulouse, with three matches left to play.
The French League said the banner was insulting but not racist.
"The sanction is appropriate," Jacques Riolacci, chairman of the disciplinary committee, said on Wednesday.
"The case is not the same as with Bastia," he added. "The disciplinary committee did not find any racist evidence from which we would have punished PSG with a points deduction."
Earlier this year, French second division club Bastia were docked two points after their fans displayed a racist banner before a match.
The banner was targeted at visiting Libourne-St Seurin's Burkina Faso-born striker Boubacar Kebe, who had previously complained about racial slurs in a Ligue 2 match against Bastia last year.
Paris St Germain have never been relegated since joining the top flight in 1974.
Everybody in the country had been shocked by the banner, with president Nicolas Sarkozy calling for tough sanctions.
Bad publicity is nothing new for PSG, at the heart of a nationwide debate in November 2006 when a policeman shot dead a Paris supporter while under attack from fans shouting racist abuse after a UEFA Cup tie against Israel's Hapoel Tel Aviv.
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