According to John Cross of the Daily Mirror, the Chilean is holding out for the staggering salary, with the Gunners having currently put a deal on the table worth more than £275,000 per week. It's noted in the piece that Manchester City want to sign Sanchez, although Arsenal do not want to sell to a possible title rival.
Bayern Munich, meanwhile, are said to have "been scared off by Sanchez's demands," prompting a feeling at the Emirates Stadium the player "is ready to see out his contract and leave on a free."
"Arsenal would then face a dilemma over whether to cash in or gamble on him signing during his final year," the piece continued. "It is a major dilemma for Arsenal boss Arsene Wenger but the figures reveal the reasons as to why they have not been able to tie down Sanchez."
If Sanchez were to stay at Arsenal, he'd be part of an exciting attacking setup, as the club confirmed the capture of Alexandre Lacazette from Lyon on Thursday:
While it's a signing that is a huge show of ambition from Arsenal, losing Sanchez would be an enormous blow to the side.
The Chilean was so often the man who carried the attack for the Gunners last season. Whether utilised from a central or wide position, he was always on the ball, always committing opponents and regularly made the difference in tight matches with some big goals.
In Lacazette, Arsenal may now boast a goalscorer extraordinaire, but Sanchez is a force of nature at the sharp end of the pitch. These figures from Squawka Football show just how important he has been since his arrival:
Even so, Arsenal need to have a limit to what they can pay out, and as tremendous a footballer as he is, £400,000 per week over the course of a long-term deal is a remarkable amount.
Sanchez, after all, hasn't always conducted himself in the best manner. The forward was dropped to the bench for last season's clash with Liverpool after he walked out of Arsenal training and clashed with team-mates, according to The Telegraph. On the pitch, there have been times when his demeanour is far from desirable.
But if Arsenal are to keep Sanchez, the team would be an intimidating prospect in the Premier League and the UEFA Europa League next season. And with that in mind, there will be a temptation to give their No. 7 what he wants.