A report from Sport states that Isco is worried about his chances of making the cut while playing a bit-part role for Madrid.
The young Spanish playmaker has been unable break into the squad under Zinedine Zidane this season.
The Madrid boss is open to selling the former Malaga star, the Frenchman does not consider him to be an essential part of his plans at the Bernabeu.
Isco has previously been linked with moves to the Premier League, with both Pep Guardiola and Mauricio Pochettino thought to be huge admirers of the player.
While Bayern Munich, who also hold an interest in James Rodriquez are also believed to be keen on taking the player if he would become available. Carlo Ancelotti will know the player well from his time managing in Spain.