Just months after his last game, Stewart took a punt by taking on the coaching job at the embattled wooden spooners, South Melbourne. He was lured to the job by ex-North Melbourne administrator, Ron Joseph, who was on a short-lived appointment at the club. The Swans were the worst performed team since the war, and their finances were beginning to spin out of control. Over two seasons, Stewart performed a minor miracle by hauling the team up to eighth in 1976 and then the following year the Swans made the finals for only the second time in 32 years. The thrilling campaign to make the 1977 finals was highlighted by a withering run in the last six weeks of the season and a bold stroke by Stewart. He switched Graham Teasdale (a forward struggling so badly that he was thinking about returning to a bush league) in to the ruck and Teasdale dominated to the extent that he won the Brownlow medal in a canter. The fairytale ended the next week when the Swans were crushed by Richmond in an elimination final. Surprisingly, Stewart now left the Lake Oval. Carlton decided to replace their coach and wanted a big name to take over, so they immediately contacted Stewart. It was a fateful decision – Stewart's perfectionism did not always make him a great communicator and he fell out with a number of the Blues' key men. After a thrashing from Richmond in the opening round of 1978, matters went from bad to worse. Captain Robert Walls left for Fitzroy; his veteran teammate
Peter Jones (who, like Stewart, had started his career with North Hobart) was relegated to the reserves; club favourite
Adrian Gallagher was removed from his assistant coaching position. All three had crossed swords with the irascible coach. Just a few weeks into the season, Stewart quit the club, citing a heart attack. Speculation was rife that he had actually suffered a nervous breakdown, a view that was supported by the fact that he had been charged by the police (under the name of
Ian Cervi) for exposing himself to daytime shoppers in Glen Huntly Road,
Elsternwick, when parked opposite the Elsternwick Post Office, but it is certain that he quit before he was sacked. Certainly, Stewart was fit enough to resume as South Melbourne coach in 1979. He could not modify his hard-driving style and the personality clashes continued, but overall he got the best out of the limited material available at South Melbourne. In reality, Stewart's three-year stint with the Swans developed into a holding pattern for the team as the club flirted with, then agreed to, a move to Sydney. With the threat of liquidation constantly hovering over performances, Stewart got the club to a creditable sixth in 1980, but overall they lost more than they won in this period. Stewart's role as coach in 1981 was made all the more difficult when he had his driver's licence cancelled for two years, when he was found guilty of having driven dangerously, and having failed to stop after an accident. Stewart continued to give opportunities to young players and publicly backed the relocation, then handed the a player list in reasonable shape for the move, at the end of the 1981 season. After departing South Melbourne, Stewart returned to serve as general manager at St Kilda. In 1983 he was involved in a controversial clearance wrangle when South Melbourne players
Paul Morwood and
Silvio Foschini crossed to the Saints without clearance from the VFL. In Round 4, Morwood played in the game against without official clearance from the VFL. The Saints ended up losing by 11 points, but had they won, they would have risked forfeiting the premiership points under the League rules at the time. Stewart defended the players' freedom to play where they wished provided they were not under contract, and when asked about the risk of forfeiting premiership points, he retorted, "We were beaten by 21 goals last week, where was the risk?" ==Life outside football==