Arsenal could be set to miss out on Isco as he is being targeted by Sevilla and Valencia.
The midfielder has been a long-term target of the Gunners and The Sun reported Arsenal’s continued interest in his signature during the last transfer window.
The midfielder eventually stayed at Real Madrid where Carlo Ancelotti hoped to make him a regular member of his squad again.
The midfielder has, however, struggled for a playing time and the Italian boss is now prepared to cut his losses and allow him to leave.
Todofichajes says his current deal expires in the summer, but Madrid wants to sell him sooner than later and they hope a club will sign him in the January transfer window.
Julen Lopetegui is pushing to be reunited with a player he managed at Real Madrid and the Spanish national team.
The Sevilla gaffer hopes he can convince him to join when the transfer window reopens.
Valencia has also declared their interest in his signature as they look to add experience and quality to their squad.
These teams represent serious competition to Arsenal with the report claiming that he prefers to remain in Spain with his family.