Athletic had been without a permanent head coach since replacing Dragoslav Stepanović with caretaker manager José María Amorrortu in March 1996.
They filled the vacancy ahead of the new season by appointing Spanish-born Frenchman Luis Fernández,[2] previously manager of Paris Saint-Germain in his adopted homeland.
Fernández's appointment led to an immediate improvement in league form, and Bilbao finished the La Liga season in 6th place.
Their performance in the Copa del Rey, however, left room for improvement.
They were eliminated at the last sixteen stage by Racing Santander, following an ill-tempered second leg at San Mamés which saw three players red carded.