Arsenal failed to secure the signing of Thomas Lemar despite having a club record £92m bid accepted by Monaco on Deadline Day.
The transfer of Lemar would have given Alexis Sanchez the green light to join Manchester City in a deal thought to be close to £60m.
Liverpool had made numerous offers for the 21-year-old Frenchman this week but it seemed Arsene Wenger's side were going to gazump them.
However, Arsenal failed to complete the signing of Lemar so both he and Sanchez will stay at their respective clubs.
The 28-year-old Chilean forward has less than 12 months to run on his current deal at the Emirates and could leave on a free transfer next summer.
Manchester City are expected to return for Sanchez in January but the player is expected to command a much smaller fee due to his expiring contract.
Ligue 1 champions Monaco have proven themselves to be a selling club this summer and Lemar will surely move on to bigger things in the near future.
The French club have sold a number of key players including Tiemoue Bakayoko, Bernardo Silva, Benjamin Mendy and Kylian Mbappe.
Why Lemar rejected Arsenal
Arsenal have long been considered in the top tier of English football clubs but - if Lemar's reasoning for rejecting them is anything to go by - that no longer appears to be true.
They failed to secure Champions League football for the first time in the 21st century and could be set to lose Sanchez and Mesut Ozil on free transfers next summer.
Alex Oxlade-Chamberlain refused to sign a lucrative new contract in order to join Liverpool and Lemar's reason for rejecting Arsenal on Thursday shows how far the Gunners have fallen.
According to French newspaper L'Equipe, the young French international - who scored two excellent goal in Thursday night's 4-0 win over Holland - only has eyes for Liverpool.
The Reds look likely to lose Philippe Coutinho to Barcelona within the next 12 months and the Brazilian's replacement may have already been decided.
Lemar can play anywhere behind the striker and Liverpool fans would surely love to see him join Mohamed Salah and Sadio Mane behind Roberto Firmino.
There is no question that Arsenal are a club in crisis right now - their humiliating 4-0 defeat to Liverpool on Sunday sums it all up.