Xabi Alonso enjoyed a fabulous career with Liverpool from 2004-09, and returning to the Reds would be a fitting end to his football experience.
According to The Daily Mail, Alonso "looks set to turn down a two-year contract extension at Real Madrid in order to leave the club next summer." The report later mentions possible destinations:
Liverpool would be interested in bringing the former Real Sociedad schemer back to Anfield, while Manchester United, Manchester City, Chelsea and Arsenal may also be tempted to make an offer.
Finishing his career in Anfield couldn't make more sense for Alonso. Not only did he play excellent football there—racking up 19 goals in 200-plus appearances—but Reds fans also love him. He would be greeted with open arms, especially if he came cheap.
From a playing standpoint, Alonso certainly wouldn't hurt a team that finished eighth in the Premier League last season. This transaction is still a year away, but the Reds don't figure to finish near the top of the table again this season.
Watching Alonso play alongside dynamic playmaker Steven Gerrard would be must-watch TV. The two talents paired together flawlessly in Alonso's first stint in Anfield, and there's no reason to think they wouldn't do it again.
You also have the matter of Joe Allen.
Allen played in 130 games with Swansea City since 2007, scoring seven goals. At 22 years old, he has considerable upside. He signed a long-term deal with Liverpool this offseason, but that doesn't necessarily mean Alonso wouldn't have a role to play.
Alonso is a veteran player and a very smart one at that. He would be an excellent mentor to Allen's still-developing game and could propel the up-and-coming talent to new heights later in his career. It's not like Alonso is a disruptive force.
This situation is perfect. It's tough to say if the finances will match up when the time comes, but it's a dream scenario for all parties involved.
Alonso would get a chance to finish his career with the Reds, Liverpool would add a still capable, consistent talent on their attack and their fans would go wild over the idea of watching Alonso and Garrard commanding the middle once again.
We will have to wait and see, but this just all makes sense.