Did you say Both teams are not performing well in the league? Real Madrid is topping the La Liga and Manchester City is also at the top of the table because in the EPL the point difference between the three best teams is not much so City can win the league if the other two teams drops points. For the records, City and Madrid can Play the final together again because they are grouped to play each other in quarter finals so one out of the two teams will get to the finals if they perform well.
Yep. He seems trying to say Real Madrid and Man City performed not very well in the domestic competition.
I can a bit agree if he referred to Man City, Man City didn't perform as well as in the last season. Although Man City is still in the top 3 of EPL, people expect that Man City will be always in the top 2 in EPL. People even wants to see Man City in the 1st place because people think Man City is the strongest team in EPL. Moreover, Man City was the champion in the last season, they even won 3 titles. So, these things that make people to feel unsatisfied with Man City performance in EPL.
Meanwhile for Real Madrid, it is untrue of they performed bad in the domestic competition. They are leading the table of La Liga, they in the 1st place. Real Madrid even already leads the table with 8 points. This makes people assume that Real Madrid already wins the La Liga competition, no other teams that are likely to overtake the position of Real Madrid. Seeing the fact, it is strange if someone claims that Real Madrid performed bad in the domestic competition.

Because both teams actually still performed quite well in the domestic competition, they have almost the same condition in their local leagues. However, the condition in the league sometimes won't always impact to the performance in UCL. So, we can't favor Real Madrid only because they are better in the local league.