At the start of the following season, MacDonald broke his leg against Southampton on 20 September 1986. By the time he recovered Kenny Dalglish had settled on Steve McMahon for the central midfield role. He made no appearances for the rest of the 1986–87 season, and just one appearance in the 1987–88 season (in the league against Luton Town on 9 May 1988). In his final season at the club, 1988–89, he made just five competitive appearances before he later had spells on loan at his old club Leicester and also at Rangers. In April 1989, shortly before he left Liverpool, MacDonald, along with his teammates, rallied round the bereaved families of the Hillsborough disaster. He scored three competitive goals in his time at Liverpool (one in the league, one in the FA Cup and one in the League Cup) as well as two goals in the Football League Super Cup, all of which came in the 1985–86 season. In June 1989 he made a permanent move to Coventry City and played out his career.