Milan Vice President Adriano Galliani has admitted there is a significant gulf between his club and La Liga's heavyweights.
The Italian giants have been forced to cut costs and sell star players Thiago Silva and Zlatan Ibrahimovic to Paris Saint-Germain this summer.
“We can be competitive with all Italian clubs,” Galliani told the Gazzetta dello Sport.
“In Europe however, there are some teams like Barcelona and Real Madrid that appear as if they're from another planet.”
Milan were eliminated from last year's Champions League by Barca at the quarter-final stage.