I wonder what kind of journalist comes up with that crap.
Is anyone really supposed to believe that Real is going to shell out 20 million for a player they won't be able to use in Europe?
I think that he can be used in Europe by Real for the knock-out rounds.
These are UEFA regulations (from 2008, I couldn't find newer ones):
24
Subsequent registration
17.17 For all matches from the start of the first knockout round, a club may register a maximum of three new eligible players for the remaining matches in the current competition. Such registration must be completed by 1 February at the latest. This deadline cannot be extended.
17.18 One player from the above quota of three who has played UEFA club
competition matches for another competing club in the current season may
exceptionally be registered, provided that the player has not been fielded:
− in the same competition for another club
− for another club that is currently in the same competition.
Furthermore, if the player’s new club is playing in the UEFA Cup, his former
club must not have played in the UEFA Cup at any point in the current
season.
If I'm reading it correctly, a club that plays in CL, can register a player who played in EL previously in the season.