Real Madrid could beat Arsenal to the signing of Schalke's Julian Draxler, according to the Daily Mail.
Arsenal boss Arsene Wenger failed to agree a deal for Draxler in the January transfer window as the north London side failed to meet Schalke's £37million asking price.
Wenger's failure to land the German international could prove costly as Real Madrid have stepped up their interest in the 20-year-old.
The Frenchman had initially thought he could entice Draxler away from the Bundesliga for £30million but were put off when Schalke demanded Arsenal to meet his buyout clause.
Wenger had hoped to sign Draxler during the January transfer window in order to relieve some of the pressure off of the shoulders of Olivier Giroud - but were foiled during the final stages of the transfer window.
Arsenal are expected to go back in for Draxler at the end of the season but may now lose the race to land their number one January transfer target.
La Liga giants Real Madrid are still tracking Liverpool's Luis Suarez but will turn their attention to Draxler if the Uruguayan decides to stay at Anfield.