The future ownership of Leeds looks to have been decided, with Massimo Cellino having successfully appealed against the Football League's block on his takeover.
Cellino, who also owns Serie A club Cagliari, failed the Football League's owners and directors' test having been found guilty of failing to pay import duties on a boat by an Italian court.
However, he is now set to take over Leeds following months of uncertainty, which saw McDermott announce he had lost his job only to then remain in his position and playing staff agreeing to defer part of their wages for March.
Deane, who enjoyed two spells as a player at Elland Road and now manages Tippeligaen side Sarpsborg in Norway, has sympathy with McDermott and the situation he has faced in recent months.
"It must be quite difficult to manage the club at the moment under the circumstances," he told Perform.
"It's probably a nightmare scenario that no manager wants to be in - not knowing how stable things are, players not getting paid and how that affects them when they go out and play.
"It can't be the best situation to be in.
"In terms of stability, it's not been the ideal situation for the players or the staff at the club but you're talking about a huge club there with a lot of potential."
Cellino has already set a target of guiding Leeds, who are currently 16th in the Championship, to the top flight within two years.
The three-time champions of England have not plied their trade in the Premier League since 2004 and Deane feels supporters must continue to be patient.
"The new owner wants to put money into the club and certainly, right now, I don't see anyone else coming forward with any money to stabilise the club," he added.
"Who knows what this guy is going to bring, we don't know, but I don't see too many people putting their hand in their pocket.
"Unfortunately for Leeds, the mistakes were made a long time ago when people were gambling with where they thought the club would finish.
"I'm sure he (Cellino) has got his plans about who he wants to bring in. All of these things cost money but I think it's important the fans give whoever comes in next, in terms of the owner, they give him time to put what he wants as a vision forward.
"One thing I think we've got to do in the country is revisit expectations. That means not every team can win the league. You have to have a project where you're looking at the long-term stability of the club over short-term expectation.
"If you gamble with the future of a club, you're going to find that, as with a lot of clubs, they're struggling.
"It has to be built on a foundation that is solid, which a lot of clubs have gambled with."
