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Not completely out of th question Colin /Loki.. and to be honest, while he's not a midfiel monster, or destroyer like his partner Mascherano was, he is a very effective holding midfielder.
I'm not ready to start wracking my brain with all the summer news and transfers (nor take the abuse despite getting a few inside scoops correct), but this one has decent legs. Xabi has still turned down the offer to negotiate his new contract, and if Fail Madrid, Fails to win the CL, I think he'd be open to considering the move, especially since I had read in Spanish, he would be willing to do so at some point, even if it meant taking a significant pay decrease to come home. Problem will be the excessive price tag Madrid would slap on him.. For as great as he is, getting on in age, it would be hard to justify 15-20M on him, when we are serious players in that realm for Christian Eriksen, who is a world class talent, and more than ready/experienced at only 21.
If Xabi handed in a request, which I just don't see him doing, we could have a better shot.
Any idea how long he has left on his current deal? I think that will be the main factor determining his price tag, and to be honest if Madrid are trying to get him to resign I assume he's into his last 18 months, meaning his transfer value is dropping. But I think the main barrier for us would be his salary. I read he's on about 4.5M Euro's at Madrid or about 75K a week sterling, which seems a bit low to me. So if he came on the market he could get offers from a host of clubs putting him above, and maybe well above 100K a week, and the question is would we be willing to match it? Or, would he be willing to sacrifice what is most likely his last big contract to come back to Anfield?