Report: Chelsea back out of race to sign Bayern's David Alaba

Chelsea have cleared the way for Real Madrid to sign one of the summer's biggest free agents.

The Blues are unwilling to match Madrid's offer of £400,00 per week to David Alaba, sources told ESPN's James Olley, all but ending their interest in Bayern Munich's out-of-contract defender.

Madrid reportedly reached an agreement with the 28-year-old in January. His representatives told other interested clubs they'd have to equal Madrid's figures to sign the Austrian international.

Chelsea reportedly considered making a late bid for Alaba before balking at his demands. The west London side is reluctant to break its current wage structure to accommodate the signing, according to Olley. Midfielder N'Golo Kante, who joined Chelsea from Leicester City in 2016, is the club's highest earner at an estimated £300,000 per week.

Director Marina Granovskaia could look at alternatives to supplement their options in defense next season. RB Leipzig's Dayot Upamecano is available this summer to any club willing to pay his £38-million release clause. However, Bayern have already expressed interest in signing the 22-year-old Frenchman.

Chelsea defender Thiago Silva, who arrived on a free transfer from Paris Saint-Germain last summer, could also extend his stay at Stamford Bridge. The 36-year-old signed a one-year deal in August with an option to extend for another year.

One of Europe's finest defenders in recent years, Alaba has made more than 350 appearances for Bayern since 2008 and won 23 titles.