McFarland started his managerial career at Bradford City as player manager when he took over from George Mulhall in May 1981. He played 40 games for Bradford in a brief spell as manager which brought the club promotion in 1981–82 via the runners-up spot in the Fourth Division. The season included a nine-game winning run, which was a club record at the time. McFarland's reign was a launchpad for the club during the 1980s but he left in controversial circumstances with allegations former club Derby County had tapped up him and assistant Mick Jones. Derby eventually had to pay a large fine and compensation for taking the pair back to the Baseball Ground.