Ex-Burnley man placed in temporary charge of League Two side following sacking of former Blackburn Rovers, Man City, Stoke City boss
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It follows the sacking of Mark Hughes, who has tonight been relieved of his duties after leaving the Bantams in 18th place in the table.
The 59-year-old guided Bradford to the play-offs last season but they have only won three out of 11 games so far this term.
McDonald, a former Claret who made over 50 appearances for the club between 2008 and 2011, has been named interim player-manager.
Bradford CEO Ryan Sparks said: “We would like to take this opportunity to thank Mark and [assistant] Glyn Hodges for their efforts and services to our football club over the past 19 months.
“They made a great impact when they arrived at the club, both on and off the field, and last season came close to delivering on our aims.
“Unfortunately, since our defeat at Carlisle in the play-off semi-final, results have been disappointing and after 11 league games we find ourselves a long way away from where we expect to be.
“As a result, the decision has been taken to move in a different direction in an effort to get our season on track.
“On a personal level, I have very much enjoyed working alongside Mark and Glyn, and we go our separate ways on good terms.
“I would ask supporters to join me in wishing both them and their families the very best for the future, while reflecting on some of the memorable moments they brought us.”
The Bantams say the process of appointing Hughes’ long-term replacement is already underway, with an announcement to be made in due course.
As for McDonald, he will take charge of his first game this weekend when the Bantams host high-flying Swindon Town. Coach Mark Trueman will be his assistant.
McDonald has only been with the club for four months, having joined on a free transfer back in June.
The Scottish midfielder, who penned a two-year deal, has previously represented the likes of Sheffield United, Wolves and Fulham.
The 34-year-old has also represented Scotland on five occasions.