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Hodgson's second season with Blackburn did not match the relative success of the first, due to numerous injuries, dressing room unrest, the failure to find an adequate replacement for departed central defender Colin Hendry and a succession of poor buys – notably the £ 7. 5 million Kevin Davies and the £ 4. 25 million Nathan Blake.
As a result, Blackburn had a disastrous start to the season.
After Berti Vogts resigned as manager of the Germany national football team in September 1998, Hodgson was contacted by the German FA to succeed him.
Hodgson declined, unwilling to break his contract with Blackburn.
When England manager Glenn Hoddle faced calls for him to resign following a much-criticised serialised diary in a national newspaper and a 2 – 1 defeat to Sweden, followed by a 0 – 0 draw with Bulgaria in the opening games of Euro 2000 qualification, Hodgson was the favourite among the media and the bookmakers to take over.
Ultimately, Hoddle stayed in the job and Hodgson was sacked two months later on 21 November 1998, with Blackburn bottom of the league table.
As Hodgson later explained, Blackburn's owner gave him the chance to resign honourably, but he refused to do so, leaving the club with no option but to sack him: " To Blackburn's honour, Jack Walker wanted me to resign, he wanted to still pay for the rest of my contract.
He said, ' Why don't you resign?
You've had enough, it's not working out.
' I refused to do that, arrogant of course as I was in those days.
I thought if they stuck with me I'd save them from relegation.
I do think that the players were very much still with me, so I couldn't resign because that would be a suggestion that in some way I was doing something or something was happening which I didn't see to be the case or the truth.
I gave him no choice but to sack me ".
His final game was a home defeat by Southampton.

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