Manchester City would rather risk losing Alexis Sanchez than meet Arsenal's £35-million asking price, according to the BBC's Simon Stone and David Ornstein, boosting Manchester United's chances of signing the Chilean.
Having already submitted a £20-million bid and agreed to a contract with Sanchez worth £250,000 a week, City is allegedly unwilling to match United's superior financial package or pay an additional £5 million in agents' fees.
United reportedly countered with a late £25-million offer this week, with Arsenal undoubtedly relishing the prospect of a bidding war for a player whose contract is expiring. Now that United is involved, the Gunners apparently have no desire to lower their demands.
Sanchez is determined to leave north London by the end of January, ESPN FC's Mark Ogden added, leaving United with a real chance to persuade the 29-year-old. The Red Devils have tried to sweeten talks by proposing Henrikh Mkhitaryan as a potential makeweight in the deal.
However, reports suggest Sanchez would prefer to join Pep Guardiola's side.
City is playing hardball on the same day Guardiola revealed Gabriel Jesus could return to action quicker than expected. That would lessen the urgency in signing Sanchez.
Arsenal manager Arsene Wenger insisted Friday he won't sanction Sanchez's departure unless his club can secure a replacement. Negotiations are allegedly ongoing with Bordeaux over the signing of 20-year-old winger Malcom.