It is not clear which clubs from other continents might be invited to take part. At the moment it is played every year.
Lee Swettenham of the Manchester Evening News relayed more details from the initial report, noting nine teams meet that criteria, meaning three places would be up for grabs.
The consortium backing the competition is being led by Japan's Softbank with the main backers coming from Saudi Arabia and the United Arab Emirates.
Madrid is part of the European Club Association, which has voiced concerns about FIFA President Gianni Infantino's proposals for a quadrennial Club World Cup to replace the annual tournament and pushed for players to get more mandatory rest periods.
The winners of the four previous Champions Leagues would be guaranteed places.
Barcelona says FIFA's plans would also "create a global platform for clubs to contribute to the growth of their brands".
Emilio Butragueno, Real Madrid's head of public relations, told his club's TV station: "We think that for fans it could be a very interesting competition".
Ziegler reports that Infantino, who has already pushed through an expansion of the Fifa World Cup to 48 teams from 2026, is keen to secure an agreement on the Club World Cup before this summer's World Cup kicks off in Russian Federation on 14th June.
The current FIFA Club World Cup is the only trophy in Liverpool's history they haven't won; losing in the final in 2005.
It is said that UEFA and the Premier League are "furious" at the idea with a $1b pot shared among the clubs.
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