The Colombia international is on a two-year loan at Bayern after falling out with coach Zinedine Zidane.
Don Balon says James would be willing to return to Madrid if Zidane was to depart.
And strengthening the case is Real president Florentino Perez's interest in Germany coach Joachim Low as Zidane's successor. Low has long been admired by Perez.
The German is also a fan of James and he has told Perez if he was to take the job, he'd want the midfielder recalled.