Alex Gibson replaced Frank Richards as manager of Preston North End in 1927. Soon after taking over the job he was forced to find a replacement for Tommy Roberts, who had been involved in a serious car accident. Norman Robson was promoted from the reserve team and managed to score 19 goals in 22 appearances. That year Preston scored 100 goals and finished in 4th position.

Alex James was becoming frustrated with playing Second Division football. In four years at Preston he scored 55 goals in 157 appearance. He also supplied the passes that resulted in plenty of goals for his strike partners, Tommy Roberts, Norman Robson, George Harrison and Alex Hair.

James was also upset with Alex Gibson for not always releasing him to play international games for Scotland. Most of all, he was dissatisfied with his wages. At the time, the Football League operated a maximum wage of £8 a week. However, other clubs had found ways around this problem. This included Arsenal who signed James for £8,750 in 1929. Herbert Chapman, the manager of Arsenal, arranged for James to obtain a £250-a-year "sports demonstrator" job at Selfridges. It was also agreed that James would be paid for a weekly "ghosted" article for a London evening newspaper.

Gibson was blamed for the loss of Alex James. Others said that if he had to go, Gibson should have got a better price for the man considered to be the best player in the Football League. The main complaint against Gibson was his failure to get Preston North End promoted to the First Division of the Football League. When Preston only finished in 7th place in the 1930-31 season he was sacked and replaced by Lincoln Hyde.