Carlo Ancelotti set to be SACKED by Real Madrid after damaging Valencia & Arsenal defeats - barring a 'miracle' - as replacement manager waits in the wings

The reigning European and Spanish champions were outclassed in a 3-0 defeat to Arsenal in Tuesday's Champions League quarter-final first leg, which came days after they fell four points behind Barcelona in La Liga by losing 2-1 at home to Valencia.

Ancelotti gave a pessimistic view of his team's chances of bouncing back in the second leg in Madrid next week, admitting that he must "throw everything in the bin". The legendary coach can still guide the Spanish giants to a treble of trophies this term, but Relevo reports his fate is all but sealed as the club's board are not pleased with his handling of the team. It would take a repeat of last season's 'miracle' to rescue his job.

Madrid's priority is to hire their ex-player Xabi Alonso as the 65-year-old's replacement, though Bayer Leverkusen insist the former midfielder has decided to stay in the Bundesliga.

Ancelotti could persuade the Madrid board to keep him in charge by guiding the team to further silverware. Otherwise, he could take over as the next Brazil coach.