Following the sale of Jimmy Case, Kennedy began to become disillusioned with Liverpool, and was sent off twice in the space of a few weeks early in the 1981–82 season – the first red cards of his career. He made his final league appearance for the club on 5 December, when he scored in a 2–0 win over Nottingham Forest at the City Ground. His final cup game for the club came eight days later, in a 3–0 defeat to Brazilian side Flamengo in the 1981 Intercontinental Cup at Tokyo's National Stadium. He was replaced in the team by Ronnie Whelan. Liverpool went on to win the league title after finishing four points ahead of second-place Ipswich Town, and Kennedy's 15 league appearances in the first half of the campaign were enough to earn him another league championship medal. Sunderland attempted to sign him on loan in January 1982, but were denied by Liverpool, and Kennedy could not agree personal terms with manager Alan Durban so was not signed by Sunderland on a permanent transfer.