Atletico Madrid are preparing to offer Julian Alvarez a lucrative new contract to secure his future at the Wanda Metropolitano and fend off interest from top European clubs this summer.

The Argentina international moved from Manchester City to Atletico in the summer of 2024 for £81 million, with sporting director Andrea Berta playing a pivotal role in the transfer. Despite settling well in Spain, Alvarez has not completely ruled out leaving when asked about his future, keeping both Arsenal and Barcelona on alert, reports alldaysport.net

Atletico are now ready to match the salary of their top earner, Jan Oblak, by increasing Alvarez’s wages from €7 million to €10 million per year. While formal negotiations have yet to begin, the club hopes a new deal will end speculation over Alvarez’s long-term commitment. His current contract still has four years remaining, backed by a staggering €500 million release clause, making a move complicated but not impossible.

Meanwhile, Arsenal are actively exploring options in the transfer market. Club legend Ray Parlour has voiced support for signing Alvarez, particularly with Gabriel Jesus potentially leaving the club at the end of the season.

‘I think Jesus might leave at the end of the season, he is at that age where he wants to be playing week in, week out,’ Parlour told Metro.

‘We could lose him. We had four strikers when I played. That’s what I don’t understand. (Regardless of Jesus leaving), bring in another one anyway. That can give the other options a lift because they see the standard being set.

‘For me, Alvarez would be a great addition to the squad. There will always be people coming and going in the summer because it’s a big squad and they can’t keep everyone happy. But Alvarez would be a fantastic option to have with his pace and what we saw at Man City.

‘It was always going to be difficult for him playing with Erling Haaland there but when he did start and when he did play, he was always lively.

‘He’s a young man too, so if he’s available it’s a yes for me. When know how Arteta likes to work with young players to make them better so I think it would be a great addition, definitely.’

Atletico’s move to secure Alvarez highlights the growing competition among Europe’s elite clubs, while Arsenal continue to strengthen their squad for the 2026/27 season. Barcelona’s interest, meanwhile, adds another layer of intrigue in one of the summer’s most-watched transfer sagas./ALLDAYSPORT/