Amid interest from clubs including Arsenal and Tottenham Hotspur, Phillips "pledged his future" to Sunderland ahead of the 2002–03 season, though he later confirmed he had submitted a transfer request in August. Manager Peter Reid brought in strikers Tore André Flo and Marcus Stewart, and warned Phillips he was no longer an automatic first choice. Phillips in fact started 32 of the 38 league matches, but scored only 6 goals as the club were relegated with just four wins and what were then Premier League record lows of 19 points and 21 goals. A second transfer request was rejected in January, but at the end of the season Phillips confirmed that the club's need to reduce its expenditure in light of relegation meant that he would be leaving. He had played in 235 matches for Sunderland, and scored 130 goals at an average of better than a goal every two games.