Arsenal has been impressed by the output of Martin Odegaard in the few games that he has played for them.
He is currently on loan at the Emirates from Real Madrid and could be heading back to Spain at the end of this season.
Arsenal has hopes that he will stay with them beyond the current campaign when his loan spell ends.
Just as they asked for a second season for Dani Ceballos on loan, they were hopeful that they can either sign Odegaard permanently or take him on loan for next season.
However, Mundodeportivo reports that it will not be possible because Los Blancos are planning to use the midfielder to lure Erling Haaland to the Bernabeu.
Both players are best of friends and national teammates and Madrid believes that they will have a better chance of signing him if Odegaard is on their books.
Haaland has all the top European teams chasing after him as he continues to score goals for fun.
In the summer, there might be a big battle for his signature and all his suitors will look for an advantage.
Madrid are determined to land his signature as his current release clause will be just £65milllion from 2022.
Arsenal will now have to keep faith with Emile Smith Rowe or target another midfielder.