Carlo Ancelotti has said Manchester City's elimination from the Champions League would be good news for Real Madrid, and insisted the struggling Premier League side remain "one of the candidates" to win the competition.

Madrid beat RB Salzburg 5-1 at the Bernabéu on Wednesday to ensure themselves of a place in the playoffs -- with an outside chance of making the top eight -- while City crashed to a 4-2 defeat at Paris Saint-Germain, leaving their Champions League future in doubt.

"Yes," Ancelotti told in his post-match news conference on Wednesday when asked if City failing to progress from the league phase would be good news.

"Because Manchester City are still, for me, one of the candidates to win the Champions League again."

In the last three seasons, Madrid and City have faced off in the Champions League knockout stage, including when Madrid won the trophy in 2022 and 2024.

Madrid have had an up-and-down European campaign so far this season, beating Stuttgart, Borussia Dortmund, Atalanta and Salzburg, while losing to Lille, AC Milan and Liverpool, to leave them on 12 points from seven games, in 16th place.

City, meanwhile, are in 25th place with just seven points, outside the playoff positions, after three losses and a draw in their last four games.

Wednesday's defeat at the Parc des Princes came after taking a 2-0 lead.

"You never know," Ancelotti said when asked about Madrid's chances of facing a tough opponent in the playoff round.

"Only one thing is clear. We have to win our last game, and at this club, that's not new."