Birmingham owner David Sullivan says his club tried to sign Michael Owen on loan after his move to Real Madrid.
Sullivan says the Blues turned their attention to Owen, who was struggling for form in Spain, after injuries to Mikael Forssell and Clinton Morrison.
"It was on the basis they would loan him but things have moved on since," he told the Birmingham Evening Mail.
"Unfortunately, Fifa rules say a player cannot move more than once in a season, unless it is within the same country."
Forssell, who is on a season-long loan from Chelsea, will be out of action until after Christmas with a knee injury.
Sullivan added: "Likewise, we are unable to go to Chelsea again for another player on loan as you are only allowed one loan per club in a season."