Chelsea have had a bid for Spain international David Villa rejected and the Valencia striker now looks set to be the latest big-name player to sign for Real Madrid.
Real have already snapped up Kaka from AC Milan this week and have had a bid for Cristiano Ronaldo accepted by Manchester United as they attempt to revamp a side that struggled last season.
Juan Cruz Sol, who is Chelsea's scout in Spain, was quoted in Marca as saying the Blues had had an offer for Villa rejected by Valencia who are "in advanced negotiations with Real Madrid".
"He wants to join Madrid because he wants to stay in Spain and that is normal," added Cruz Sol.
"There is no chance of Villa going to Chelsea because he wants to go to Madrid."
Reports in the Spanish media suggest Real have agreed to let Alvaro Negredo, who recently returned to the Bernabeu after spending the last two seasons with Almeria, move to the Mestalla as part of the deal.