The 26-year-old only has one year left on his contract at the Bernabeu and there has been no progress on him signing a new agreement.
This is despite a decent season for Real Madrid last time around, making 31 appearances in La Liga and scoring 10 league goals, while he turned out eight times in their Champions League winning campaign.
The versatile attacking midfielder is reportedly available for just £25m during this transfer window, a figure which has alerted plenty of possible suitors.
Arsenal have been linked with him for much of the summer already, as have AC Milan, but Spanish publication AS now report that Newcastle have entered the fray.
Liverpool and Manchester United have also been mentioned as possible destinations for the Spaniard, but appear to be much less keen than his other suitors.
Newcastle will likely be offering absolutely enormous wages to the Spain international, but will not be able to offer Asensio the Europa League action that Arsenal can or the Champions League football that AC Milan will be playing next season.
There remains the chance that Asensio could stay in Madrid as the club did offer him a new contract earlier this year, but he did not get the wages he was looking for so he turned it down.
Real Madrid boss Carlo Ancelotti said of him in April: ‘He’s a footballer with extraordinary quality. He suffered a major knee injury that forced him to be out for a long time with a very slow recovery.
‘He’s an important player who has helped us a lot. I don’t know what’s going on with his future. I think he’s talking to the club to renew his contract, but I can only speak about him from a technical perspective.’
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