The club gained promotion in 2001 as Third Division winners, following a nail-biting championship decider on the final day of the season against second-placed Rotherham United. Promotion had been confirmed courtesy of a 3-0 victory over Exeter City.

In July 2001, following demotion back to 3rd Division, the club was sold to managing director Mike Lewis for £1. Lewis subsequently sold on his stake to a consortium of Australian businessmen behind the Brisbane Lions football team, fronted by outspoken Londoner Tony Petty. The move prompted perhaps the most controversial era in the club's history as 7 players were sacked and 8 others saw their contracts torn up. Fans were incensed by the loss or sale of star players, and amid threatened sanctions by the Football League, another consortium headed by ex-player Mel Nurse sought to purchase out the new owners.

The troubles led to the formation of the Swansea City Supporters' Trust, which sought to save the club and ultimately guarantee supporter representation on the club's board.