The 2006–07 European football season was the 103rd season of Sport Lisboa e Benfica's existence and the club's 73rd consecutive season in the top flight of Portuguese football. The season ran from 1 July 2006 to 30 June 2007; Benfica competed domestically in the Primeira Liga and the Taça de Portugal. The club also participated in the UEFA Champions League as a result of finishing third in the Primeira Liga in the previous season.
After manager Ronald Koeman's departure, Benfica immediately searched for a replacement. Media speculated the club would sign Sven-Göran Eriksson and later Carlos Queiroz, but Benfica signed the former Porto and Sporting CP manager Fernando Santos. Santos was the first manager since Fernando Riera to manage all of Portugal's Big Three clubs. In the transfer market, Benfica brought back Rui Costa and recruited other notable players including Katsouranis and David Luiz. Fabrizio Miccoli had his loan renewed for a second year, while Geovanni, Manuel Fernandes and Ricardo Rocha left the club during the season.
Because of their league finish, Benfica had to pass Austria Wien to enter the group stage of the season's Champions League. Domestically, Benfica's season started erratically, losing 11 points from three losses and a draw before December. In Europe, the situation was similar; Benfica never recovered a five-point deficit to Celtic by day three, ending with seven points and demotion to the UEFA Cup. From December until April, Benfica regained lost ground in the Primeira Liga, climbing to second place—a point away from Porto, which was also advancing until the quarter-finals of UEFA Cup
In April, Benfica had the opportunity to reach the league's top place if they won the Clássico with Porto; however, they only managed a 1–1 draw. It was the first of five winless games that caused them to drop to third place and be eliminated from Europe by Espanyol. Despite an improvement in form, Benfica wasted a chance to retake second place after another home draw against arch-rival club Sporting. Benfica ended the season in third place, with two fewer points than Porto, ensuring a place in the Champions League.
Season summary
Pre-season
In the aftermath of Ronald Koeman's departure, Portuguese media began to speculate about Benfica's next manager. They initially focused on Sven-Göran Eriksson, who had previously managed the club and was in Algarve preparing for the World Cup with England's national squad. On 17 May, Eriksson said he had not been approached to join Benfica. José Antonio Camacho's agent dismissed speculation about his return. On 19 May, SIC Notícias announced Carlos Queiroz had signed a two-year deal with Benfica. Both parties immediately denied any agreement; Queiroz said he did not intend to leave Manchester United. The following day, Benfica presented Fernando Santos as the club's new manager on a two-year contract. Santos had last managed in Portugal in 2003–04, when he led Sporting to a third-place finish, and previously spent three years at Porto, winning five major titles. He became the third manager—the first Portuguese—to manage all of the country's Big Three football clubs, after Otto Glória and Fernando Riera. He would be assisted by Fernando Chalana, who remained connected with the club's management; Jorge Rosário as his long-term technical assistant; Bruno Moura as physiotherapist and Ricardo Santos as scout of the opponents.
Benfica's first signing of the season was Rui Costa nicknamed "The Maestro", who arrived for free and was well received by 3,000 supporters. He reportedly took a large pay cut to join Benfica. After Costa, Benfica selected Kostas Katsouranis as their top target in the search for another central midfielder. They negotiated with AEK Athens for over two weeks and agreed a transfer on 22 June. Benfica was also interested in signing Andrés D'Alessandro, but the deal fell through. In the offence, Fabrizio Miccoli had his loan deal renewed for a further season, and Benfica signed another option, Mexican striker, Francisco Fonseca. The biggest losses for Santos were the release of Geovanni—a regular starter for three-and-a-half seasons— and Manuel Fernandes, who joined Portsmouth on a loan deal.