According to the Daily Star, Real Madrid would rather sell Khedira at a cut price than lose him for nothing at the end of his contract next summer. The World Cup winning midfielder has so far failed to renew his contract, and it doesn't look like he intends to.
As a result, Chelsea and Arsenal are eyeing up a bargain. Both Premier League clubs have been heavily linked with the midfielder, who helped Germany to a fourth World Cup triumph this summer.
Chelsea boss Jose Mourinho is a big fan of the Real Madrid midfielder, having signed him while he was Real Madrid manager. He reportedly wants to bring him to Stamford Bridge, with the likes of John Obi Mikel expected to be made available before the end of the transfer window.
Mourinho is currently counting on Cesc Fabregas, Nemanja Matic and Obi Mikel to play in his dual holding role at the base of his 4-2-3-1 formation. Khedira would represent a considerable upgrade over the Nigerian international, and would give Chelsea one of the best midfields in world football.
But it's not just the Blues who are keen on Khedira - Arsenal too, have been linked with the midfielder. And the Gunners boss is in desperate need of another holding player.
His Arsenal side were found out on more than one occasion in the big games last season, and suffered from the lack of a defensive minded presence in midfield, the sort of which Khedira can provide.