Carlo Ancelotti admits his future at Real Madrid is in doubt, claiming his time could be up as early as “tomorrow” but will always be grateful to the club.

Madrid were knocked out of the Champions League quarter-finals 5-1 on aggregate by Arsenal as they looked a shadow of the team that won the competition in two of the last three seasons.

Ancelotti’s team are also four points behind Barcelona in LaLiga with seven games remaining.

Ancelotti’s contract at the Bernabeu runs until 2026.

When asked about his long-term future as Real Madrid boss, Ancelotti said: “It could be this year, next year when my contract runs out…There’s no problem about it. But when I am done here, I will be grateful to this club. It could be tomorrow, in one year, or in 10 years, but I will be grateful to this club. And that’s it. Full stop.

“We have done very well in the last seasons but this year we have had to suffer. Things haven’t gone as expected but in sport in happen because there are no unbeatable teams.

“Arsenal were better than us. We tried to do our best. Maybe the overturned penalty was a turning point. That could have changed it.

“But Arsenal defended very well. We found it difficult to find spaces. We were better than normal in our intensity level but it wasn’t enough.”

Brazil ‘hopeful’ of appointing Ancelotti

Brazil are understood to remain hopeful of appointing Ancelotti as their new head coach.

A source has told Sky Sports News’ Amar Mehta that Diego Fernandes, a prominent Brazilian businessman, is attempting to broker a potential deal.

It is understood that Fernandes has ties with Ancelotti’s team and the Brazilian Football Federation (CBF).

Although not officially affiliated with the CBF, Fernandes is said to be in close contact with the 65-year-old and his involvement is being described by the source as “highly strategic”, as part of the CBF’s attempts to bring the Italian to Brazil.

However, it is understood that there is mounting concern within the Brazil camp that time is running out to make the appointment and the national team cannot afford to remain without a head coach until August, with two World Cup qualifiers the following month.

Their next games come in June against Paraguay and Ecuador in World Cup 2026 qualifying and Brazil have been without a manager since sacking Dorival Junior following a 4-1 loss to Argentina in March.

Ancelotti’s current contract at Real Madrid ends in June 2026 and Real have been linked with Bayer Leverkusen manager and former Real player Xabi Alonso.

Ancelotti has been widely reported to be the Brazil national team’s target since last year’s Copa America. They are also reportedly interested in Jorge Jesus, the current manager of Al Hilal in the Saudi Pro League.

The CBF have been contacted by Sky Sports News.