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After the verdicts penalized numerous clubs, Palermo's overall position for that season was elevated to 5th, meaning they had qualified for the 2006–2007 UEFA Cup. In the transfer window, Palermo spent millions adding players to their squad, including Aimo Diana, Mark Bresciano, Fábio Simplício and Amauri, but sold World Cup winner Fabio Grosso to Internazionale. Several football experts and pundits tipped Palermo to do well in the season ahead, including Alessandro Del Piero.
On 2 February 2007 Palermo was involved in a controversial away Sicilian derby match which was suspended for 30 minutes during the second half after some tear gas explosions from outside the stadium, used by the police to minimize hooliganism outside the Massimino Stadium, drifted onto the playing area. After the match, violence went on and policeman Filippo Raciti was killed by a small explosive launched by a Catania hooligan. This led Commissioner Luca Pancalli to suspend indefinitely football leagues and national team matches in the whole country. Following these events Palermo, which was clearly third-placed at the time, was not able to achieve a single victory, and dropped to sixth position in the Serie A. Maurizio Zamparini, the chairman, became more and more critical of Guidolin, who was finally sacked on 23 April following a 3–4 home defeat to third-last placed Parma which extended the run of poor results to 11 games without a single win. Assistant coach Renzo Gobbo and youth team coach Rosario Pergolizzi were subsequently appointed as caretaker coaches at Guidolin's place. On their debut match, Pergolizzi and Gobbo led Palermo to a 2–1 away win at Livorno, finally ending the negative run. The victory was however followed by two further defeats, including an upset 3–2 away loss against last-placed team Ascoli, already relegated to Serie B, which left the rosanero in seventh place, the last UEFA Cup spot, only three points above Atalanta. The events led Zamparini to reappoint Guidolin as head coach for the remaining two matches. Guidolin's return brought two victories, to Siena and Udinese, clinched fifth place in the final table, qualification to the UEFA Cup 2007-08 for the third consecutive time and broke its previous record of 53 points of two years before.