Paul Hetherington of the Daily Star exclusively reported Los Blancos have informed City of their valuation and that they're not prepared to accept anything less.
The Croatian could feature in the World Cup final on Sunday, though during the tournament he has often been on the bench, with manager Zlatko Dalic instead preferring the trio of Luka Modric, Ivan Rakitic and Marcelo Brozovic.
Despite the talent in front of him, Rory Smith of the New York Times has struggled to fathom why he has not been used more for his national side:
Kovacic has encountered a similar problem at the Santiago Bernabeu, where he's been behind Modric, Toni Kroos and Casemiro in the pecking order.
The 24-year-old started just 21 of 36 appearances in all competitions last season and only completed 90 minutes seven times, three of which were in the Copa del Rey.
A superb box-to-box player and all-rounder in midfield, he can pick out a pass, beat opponents on the dribble or reclaim possession.
Managing Madrid's Kiyan Sobhani noted how difficult it is to win the ball cleanly off him, such is his technical ability:
He rarely gives it away with a misplaced pass either, thanks to his unerring distribution:
Kovacic would fit in well at the Etihad Stadium under manager Pep Guardiola, but Real's determination to have their valuation met will likely prove off-putting for the Citizens.
According to Stuart Brennan of the Manchester Evening News—who reported City will not target an alternative to Jorginho—the Premier League champions would rather walk away from a transfer target than pay more than their own valuation.
If City do decide to pursue another midfielder, it seems they'll look elsewhere.