Steve McMahon was born in Liverpool and played professional for both Everton and Liverpool. While at Liverpool he got capped 17 times, the last time against Ireland in 1991. On Christmas Eve the same year he signed for City for £900,000 and went on to make 87 appearances and scored a single goal against Norwich. McMahon was brought as a replacement for the playing manager Peter Reid, and he did a god job for the blues in his short time at the club. He became popular with the fans for his hard working and gutsy displays, and even though he lacked pace and his knees were putting him out of action from time to time, he could still turn the games into City's favor and let younger players like Flitcroft and Lomas blossom at his side.
McMahon left City to become the player-manager of Swindon Town in 1994 for the cut-price of £100,000. He led Swindon the division 2 championship the following year, but during the next three years he failed to bring the club above the 17th position. McMahon resigned in September 1998, after Swindon had lost 5 of the 9 opening games of the 1998/99 season. He was eventually succeeded by Jimmy Quinn.
In January 2000 he landed the Blackpool managerial job taking over at
Bloomfield Road after Nigel Worthington, but could not prevent them from
being relegated to the Third Division. The following season he led Blackpool
to the play-offs where they beat Leyton Orient in the final. After that
the club finished 16th and 13th in Division Two but once again found themselves
struggling in the lower half of the table. McMahon was frustrated by the
lack of funds at Bloomfield Road a report of unrest amongst players, may
have led to him offering his resignation in January 2004, four years after
taking charge of the club. He later withdrew the resignation and led the
team to survival only to be replaced by Colin Hendry (another City favorite)
the following summer.