Arsenal and Chelsea put on red alert as Barcelona blunder makes £51m star available for free

Arsenal and Chelsea have been handed a major update on Dani Olmo's future at Barcelona. The 26-year-old was heavily linked with a move to the Emirates Stadium and Stamford Bridge in the summer before penning a deal at the Camp Nou instead.

The Catalan outfit signed Olmo from RB Leipzig in a deal worth around £51m (€60m) after he helped Spain win the European Championship for a record fourth time. Rubbing shoulders with Harry Kane and Jamal Musiala, he finished the tournament as the joint top-scorer with three goals.

Despite signing a six-year contract at Barcelona on August 9, he wasn't eligible to play until the end of the month. Olmo even missed the first two games of the season, because the club didn't have the funds to register him, while also remaining compliant with La Liga's strict financial rules.

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Every team in La Liga has an annual spending limit, and Barcelona's has been fixed at £351.5million (€426m) for the ongoing season. In order to free up space for their new signing, Barcelona let Ilkay Gundogan join Manchester City for free and loaned Clement Lenglet to Atletico Madrid.

Olmo, who earned his stripes in the famed La Masia academy, has since featured nine times in the Spanish top-flight, scoring five goals. Playing a key role in Hansi Flick's side, the Spaniard has fired Barcelona to the top of the table ahead of rivals Real Madrid.

Olmo has proven to be an excellent signing, but Spanish publication Mundo Deportivo have reported the Catalan giants could lose him for free in January, as per a clause in his contract, if they don't extend the registration before December 31.

The report states that Barcelona could only afford to register Olmo for the first half of the season - after going to extreme lengths to cut costs. That said, Deco has recently claimed the club will be able to prolong the midfielder's registration before the deadline on New Year's Eve.

Speaking to Movistar, Barcelona's sporting director was asked if the club will be able to register Olmo before the end of the year. As quoted by ESPN, he said: "Yes, of course. We're working on it and everyone is calm.

"These are internal issues at the club. Don't worry, we'll fix it. The player is calm, don't worry."

At an event on Thursday, the La Liga president was quizzed about Barcelona's situation. As quoted by Sport, Javier Tebas said: "I hope Barça manage it. I am positive they will. They are working on it and I am optimistic. At the end of the day, they always manage it, so let's see. [Olmo] is a player I like a lot. He's an extraordinary player."

With Arsenal and Chelsea eager to narrow up Liverpool's advantage at the top of the Premier League table, Olmo could be a shrewd - and potentially title-defining - acquisition if things play out in the transfer market.