The alternative would be to see the German go to Chelsea for free.
The paper suggest that the Champions League winners would be willing to accept a fee of even less than the £12 million they reportedly rejected last summer, as it'll at least mean some money in return for Khedira's exit.
The Standard themselves had reported that the Blues are preparing a pre-contract offer for the German in January, meaning they would sign him for free next summer.
But Real would prefer to sell to the Gunners this January to avoid him leaving for nothing.
Other recent reports have suggested that Arsene Wenger will be handed a transfer kitty of £20 million in January, with players of around £10m in value targeted.
That could tie in perfectly with Khedira, as Madrid are prepared to accept a lower transfer valuation.