Real get tough with Karanka
Sources in Spain indicate that Karanka could be looking for a way back to his home region, perhaps with Athletic Bilbao, but his decision not to stay with Madrid has seen youngster Francisco Pavon given a chance to secure a starting berth in the Real side.
With Fernando Hierro coming to the end of a distinguished career and Ivan Helguera eventually deciding on midfield as his best position, it would seem that Real will be concentrating on their defence in the summer.
Real's sporting director Jorge Valdano said: "We made a final effort in negotiations but couldn't get anywhere nearer an agreement.
"There is too much distance between what we are prepared to offer and his demands.
"The money is the sticking point and we made it clear to him what we were prepared to offer several months ago. We won't budge from that.
"I'm sure he won't have any problems choosing another side because he's a good age and is doing very well.
"We need to be looking in a younger and more dynamic market as we have several players who are almost 30.
"Hierro has got two more years of football in him. The problem is that there are no younger players comparable to Hierro."
At 28, Karanka is coming into his prime, having established himself at Santiago Bernabeu for the past three seasons and there is likely to be no shortage of suitors for the ex-Atletico Madrid man.