The Blues' American co-owner Todd Boehly has spoken of his desire to establish a network of partner clubs around the globe, following the model of Manchester City or the Red Bull franchises.
The London Evening Standard says Santos, whose academy produced Pele and Neymar, were approached by Chelsea but weren't interested in a partnership.
They say Chelsea are expected to reconsider their options in Brazil and look at buying a smaller club.
Boehly held talks with Chelsea academy manager Neil Bath and high-profile agent Jorge Mendes, who is Portuguese, over the summer about building a club network.