"If Kaka is named in the Olympic squad then he would not be able to play two very important games if we finish the current Serie A season in third or fourth place," Leonardo told O Globo.
"The competition clashes with games that represent a major percentage of the club's finances.
"It has nothing to do with saying that Milan won't release a player. There are regulations we follow on this and the Olympic games are not organised by FIFA."
Although FIFA regulations would not force the Diavolo to allow Kaka to compete, Leonardo suggests that an agreement may be reached in any case.
"Sepp Blatter of FIFA and Michel Platini of UEFA are very good and Brazilian Football Federation President Ricardo Teixeira is a powerful man," he stressed.
"There is a level of communication that did not exist in the past."