Ancelotti was shown listening to the song, which concluded with the lyric: "A herd of unhappy victims, crybaby fans with an inferiority complex, who can't handle always being second, I know it hurts, I know it's ugly, but Atletico lacks balls".
As sports daily quote Ancelotti as saying on Friday that he had not heard the song but that it was "neither good nor correct". The Italian's Atletico counterpart Diego Simeone declined to comment when asked about the song at a separate news conference, As reported.
Known as the mattress makers after their red and white striped shirts, Atletico were long overshadowed by their wealthier neighbours but have turned the tide in recent seasons under the inspirational Simeone.
They won 2-1 after extra time in the 2013 King's Cup final, held at Real's Bernabeu stadium, and came within seconds of beating the world's richest club by income in last season's Champions League final.
They won the La Liga title last term, their first in 18 years, and followed up by winning the season-opening Spanish Super Cup against Real and securing victory at the Bernabeu in La Liga in September.
"What's wrong, mattress maker, you still haven't realised that Europe is ours and you are a disgrace," the song begins.
"The years go by, players, officials too, but you don't realise that the problem is your people."
Real and Atletico are on course to meet over two legs in the last 16 of the King's Cup next month.
(Reporting by Iain Rogers, editing by Toby Davis)
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