Kenny Dalglish pays the price for failure

Kenny Dalglish's second coming as Liverpool manager is over after he paid the price for failing to compete for a Champions League place.

Liverpool's owners Fenway Sports Group brought Dalglish's 18 month reign to an end with an emotional tribute, duly recognising the Scot's legendary status and enduring contribution as both player and manager.

Their decision followed face-to-face talks with the 61-year-old in America earlier this week when it became apparent the manager would be forced to step down due to an inconsistent season.

He had returned to Merseyside while the terms of his and assistant Steve Clarke's departure were finalised.

Dalglish lost his job because of a poor sequence of Premier League results and performances, particularly since January, which left Liverpool well short of the top four ambition set by owner John Henry.

There was a mood of melancholy at Anfield as Dalglish's exit was confirmed with glowing praise from his bosses.

"Kenny will always be more than a championship winning manager, more than a championship winning star player," said Henry.

"He is in many ways the heart and soul of the club. He personifies everything that is good about Liverpool Football Club. He has always put the Club and its supporters first. Kenny will always be a part of the family at Anfield." Chairman Tom Werner credited Dalglish with stabilising Liverpool after a turbulent period, laying the foundations for a successor.

"Kenny came into the club as manager at our request at a time when Liverpool Football Club really needed him," said Werner.

"He didn't ask to be manager; he was asked to assume the role. He did so because he knew the Club needed him. He did more than anyone else to stabilise Liverpool over the past year-and-a-half and to get us once again looking forward. We owe him a great debt of gratitude."

Dalglish thanked the owners for handling his departure in 'an honourable, respectful and dignified way'.

"It has been an honour and a privilege to have had the chance to come back to Liverpool Football Club as manager," said Dalglish.

"I feel proud that we delivered the club's first trophy in six years winning the Carling Cup and came close to a second trophy in the FA Cup Final. Of course I am disappointed with results in the league, but I would not have swapped the Carling Cup win for anything as I know how much it meant to our fans and the club to be back winning trophies." The search for his replacement has begun. FSG will pursue a young, dynamic manager in tune with the demands of the European game, with Borussia Dortmund manager Jurgen Klopp an early frontrunner.

The club insists no approaches were made to any candidate prior to Dalglish's exit, but it is understood Dutch national coach Bert van Marwijk and German boss Joachim Low will also be considered for the role as Liverpool look for the highest calibre managers. Despite his interest in a return to Anfield, former manager Rafael Benitez will not be considered.

"Our job now is to identify and recruit the right person to take this club forward and build on the strong foundations put in place during the last 18 months," said Werner.

Given owner Henry made his fortune analysing statistical data, it is no surprise Dalglish's departure ultimately came down to a numbers game.

Liverpool spent pounds 120 million on seven new players and finished eighth.

They were 37 points behind the title winners and 17 points behind fourth placed Spurs. Dalglish's team scored fewer goals than relegated Blackburn and won the same number of home games. Their record at Anfield was the worst since relegation in 1953-54.

Dalglish's latter days were dominated by pleas to look at the bigger picture and he hoped the Carling Cup win and occasional flashes of brilliance would save him. It was the portrait of the here and now which mattered most to the owners. There was not sufficient evidence to suggest he would inspire a significant improvement next season.

Dalglish's cause was hindered by the fact he was never FSG's man.

Henry candidly admitted this, admitting he'd turned to Dalglish during a period of volatility after his takeover.

Henry wanted a young coach such as Didier Deschamp or Andre Villas Boas (both also back in the reckoning for the job) to replace the beleaguered Roy Hodgson. At the time, neither were available and the FSG vision was immediately compromised.

So they turned to the ultimate Kop icon and Dalglish was asked to resume where he'd left in 1991, initially in a caretaker capacity while the search for a full-time appointment continued.

In his six months in temporary charge, Dalglish was an instant catalyst for improvement.

The arrival of Luis Suarez two weeks after his appointment helped, but other fundamental changes convinced the Americans to offer a three year deal. More varied training, assisted by Clarke's arrival, a more attractive brand of football and personable management of players who adored their boss even if privately many of them wondered if the tactical nous would match the off-field charisma.

In his first six months, Dalglish won as many points as the top four.

The numbers began to add up for Henry. Dalglish, he decided, could be trusted with the huge summer outlay that was so critical to restoring Liverpool's position among the European elite.

Jordan Henderson, Stewart Downing, Charlie Adam, Jose Enrique and Sebastian Coates arrived at a cost of over 60 million, building on the pounds 58 million already invested in a new strikeforce.

"We'll be disappointed if we're not in the top four," said Henry, setting heightened expectations.

The shape of the team was altered. Raul Meireles, voted the second best player of the 2010-11 season, was sold. Maxi Rodriguez and Dirk Kuyt, two of the best players in Dalglish's first six months, were increasingly marginalised for the new arrivals.

Returning to the Champions League after one season was a target rather than a job condition. Had Liverpool still been in a fight for a top four place when the Easter Eggs were being digested Dalglish's position wouldn't have been subject to a review, but the league position was a growing concern after a sequence of home draws and inauspicious start for the new boys.

Then there was Suarez-gate. Dalglish influenced every miscalculation from the moment an inflammatory word was aimed at Patrice Evra.

It seemed the Director of Football, Managing Director and, initially, even the owners, bowed down to the conspiratorial accusations against the FA and Manchester United. Wearing a 'Suarez' t-shirt played out beautifully to those Liverpool supporters who relished a scrap but poorly to everyone else. Eventually, the saga ended with apologies and FSG intervening to take control of their own club.

Comolli, appointed to be FSG's eyes, ears and man on the till had gone 'native', being controlled by Dalglish rather than imposing his own authority.

When he was dismissed before the FA Cup semi-final, the implications for Dalglish were clear. Although Comolli took the blame, Dalglish could not escape culpability.

He won the Carling Cup and reached the FA Cup Final, but the league form deteriorated. Weekly hard luck stories made no impression on Henry and Werner.

When Dalglish was appointed the permanent Liverpool manager a year ago it was described by the Anfield board as 'a no brainer'.

Despite the tributes, with Liverpool nearer the bottom three than top four despite a pounds 120 million investment in the squad, Liverpool's owners evidently feel his departure was a no-brainer too