Real Madrid reportedly consider loaning Mateo Kovacic out, but Liverpool challenge Milan for him.
The Croatian midfielder moved to the Spanish side from Inter last summer, but found his opportunities limited.
Los Merengues are believed to be close to signing André Gomes from Valencia, which would see even more competition for places in midfield.
According to Marca, Madrid Coach Zinedine Zidane is an admirer of Kovacic, but recognises his need to play.
As a result, the 22-year-old could be sent out on loan, but Real Madrid are not keen to offer a buyout clause.
Liverpool and Milan are thought to be the most seriously interested sides, with the Rossoneri looking for a loan with obligation to buy.
In order to sweeten the deal, a buyback clause could be inserted, similar to the arrangement which saw Alvaro Morata move to Juventus before returning to Bernabeu this summer.
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