Schmeichel's decision to leave United after eight seasons prompted Ferguson to bring in replacements: Mark Bosnich from Aston Villa and Italian Massimo Taibi. The latter featured in four matches, the last of which a 5–0 defeat at Chelsea in October 1999; he was not selected again by Ferguson. United ended the 1999–2000league season as champions, with just three defeats and a record points margin of 18.[96] In December 1999, the club beat Palmeiras in Tokyo to win the Intercontinental Cup,[97] but a month later exited at the group stage of the inaugural Club World Championship,[98][99] although Ferguson insisted the tournament was "fantastic".[100] United failed to retain the Champions League, as they lost in the quarter-final stage to eventual winners Real Madrid.[101][102] Ferguson sought to strengthen his squad and signed Fabien Barthez from Monaco for £7.8 million.[103] He also monitored the progress of Ruud van Nistelrooy, "a striker of the highest calibre".[104] He met the player and his agent in Manchester to discuss formalities and was informed of Van Nistelrooy's troubled right knee.[104] Ferguson was not agitated by this; he recalled from experience a similar niggle that did not stop his playing career.[104] Van Nistelrooy however failed his medical, but Ferguson reassured him that "we might yet find a way out of the nightmare."[104] The deal was resurrected in April 2001, for a British record transfer fee of £19 million.[105]
In the 2000–01 season, United retained the league title for a third season, becoming only the fourth side in history to do so. The achievement was overshadowed by reports of a rift between the club's board and Ferguson.[106] He told the club's television channel MUTV that he was prepared to sever all ties with the club, once his contract ended the following year: "The decision has been taken. I'm going to leave the club. I'm disappointed with what has happened because I was hoping something would be sorted out. It hasn't happened as I thought it would and that's all there is to it."[107] Both parties eventually reached a compromise which pleased Ferguson: "I am delighted we've settled this. When you have been at the club as long as I have it gets in your blood."[108] Ferguson's decision to retire came about because he perceived his chances of winning a second European Cup as "imponderable." Age was another factor: reaching 60 acted as a "psychological barrier ... It changed my sense of my own fitness, my health."
In May 2001 McClaren left to become Middlesbrough manager,[109] with Jimmy Ryan being named assistant to Ferguson for the duration of the campaign.[110] United once more broke their transfer record with the purchase of Juan Sebastián Verón from Lazio for a reported £28.1 million.[111] In August 2001, Stam was transferred to Lazio for £16 million.[112] The player reportedly moved because of claims in his autobiography Head to Head; Stam implied that Ferguson illegally contacted him about a move to Manchester United, before informing PSV.[113] Ferguson said he sold the player because the club needed to cut back on its "massive wage bill".[114]He replaced the defender with Laurent Blanc, a long sought after target.[114] In an interview with Alastair Campbell eight years after, Ferguson described his biggest mistake at the club was "letting go of Jaap Stam. No question."[115]
The club endured a poor first half to the season and languished in ninth position after a home defeat by West Ham in December 2001.[116] On the night of Christmas Day, Ferguson shelved his retirement plan. His family convinced him to remain in charge of United; Cathy bluntly listed her reasoning: "One, your health is good. Two, I'm not having you in the house. And three, you're too young anyway." Ferguson informed Watkins of his u-turn the following day and resumed work at once.
Once Ferguson publicised his decision to remain in February 2002, United's form improved. The team won 13 out of 15 matches, though finished third in the league behind Arsenal and Liverpool. United was unsuccessful in Europe, losing their Champions League semi-final on away goals to Bayer Leverkusen.[117] Early exits from the League Cup and FA Cup meant they ended the season trophyless. Ferguson himself admitted that the decision to pre-announce his retirement had resulted in a negative effect on the players and on his ability to impose discipline
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