The financial cost of relegation the previous season saw Ipswich enter
administration on 10 February. The financial problems had caused the sale of both key players like
Marcus Stewart and promising young players like
Titus Bramble and
Darren Ambrose, leading to poor results on the pitch that left Ipswich struggling near the relegation zone. A 3–0 defeat at fellow strugglers
Grimsby Town proved to be the final straw and manager
George Burley was sacked in October. First team coach and former Ipswich player
Tony Mowbray took charge of the next four games, winning one, before being replaced by
Joe Royle - a former player for Town's archrivals
Norwich City. Royle turned Town's fortunes around considerably and they finished in 7th place, 4 points off the playoff places. In the League Cup, Ipswich reached the fourth round before being knocked out by eventual winners
Liverpool 5–4 on penalties, after
Tommy Miller's strike in the fourteenth minute was cancelled out by
El Hadji Diouf's 54th-minute penalty. ==First-team squad==