In the summer of 1991, Stoke chairman Peter Coates offered Smith the vacant management position at the club, but Smith decided that potentially being dismissed by his hometown club would be too intense an experience emotionally, and chose to stay loyal to Sunderland. This was despite finances being tight at Sunderland as the club saved the money to build the Stadium of Light. However, after just 4 wins in the opening 14 matches of 1991–92, Smith decided to sell star striker Gabbiadini to Crystal Palace for £1.8 million in order to raise funds to improve the squad. He then spent £350,000 on Celtic left-back Anton Rogan and brought in strikers Don Goodman (£900,000 from West Bromwich Albion) and John Byrne (£225,000 from Brighton & Hove Albion). Smith was dismissed on 30 December 1991, with Sunderland lying 17th in the Second Division. His former assistant Malcolm Crosby took Sunderland to the 1992 FA Cup Final, in which they were beaten by Liverpool.