• Arsenal manager says ‘every kind of solution’ is possible • ‘Both players look happy here; I hope that the situation can be turned around’

Arsène Wenger has admitted Arsenal may be forced to sell Mesut Özil and Alexis Sánchez in January if there is no sign of a breakthrough in contract talks before the transfer window opens.

Özil and Sánchez are both in the final year of their deals and, while Wenger remains hopeful negotiations with his two biggest players will reach a successful conclusion, the manager opened the door to cashing in on the pair if the situation drags on.

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“Once you are in our kind of situation we have envisaged every kind of solution, yes,” Wenger said. “It’s possible.”

Wenger’s admission could prompt Manchester City to revive their interest in Sánchez, who was aggrieved when a move to Pep Guardiola’s side fell through in the summer. However, Wenger has not put a deadline on talks with either player and said he was encouraged by Özil’s agent saying the German, who is after a massive pay rise before committing himself to Arsenal, wants to stay in the Premier League. Özil earns £140,000 a week and the 28-year-old, who is set to return for the visit to Watford on Saturday, is said to be giving serious thought to staying at Arsenal because of a shortage of suitors.

“That’s my understanding,” Wenger said. “I always said the fact that we didn’t find an agreement last year doesn’t mean the player will necessarily leave. Both players look happy here and overall I hope the situation can be turned around. At the moment, we are not close enough to announce anything.”

Wenger does not believe Chile’s failure to qualify for the World Cup finals will give Sánchez less of an incentive to produce his best form for Arsenal, although he accepted the forward is likely to be suffering emotionally after a 3-0 defeat by Brazil meant the Copa América champions missed out on a place in Russia next summer. “He is in a very difficult mind,” Wenger said.

“Chile just won the Copa América twice and now they don’t even go to the World Cup. Sánchez is 29 at the end of the year, so the next one he will be 33. He expected to go. Certainly it is a big disappointment for him.

“I have no doubt he wants to perform. He never goes on the football pitch to lose a football game. Sánchez is a winner. You want your players to be in a positive mind and to have positive experiences. To go to the World Cup is the target of every single player who plays football.”

Sánchez flew back to London on Thursday and Wenger is worried he will not be ready to start against Watford after a gruelling match against Brazil. “I watched the game, what a physical game it was,” Wenger said. “The number of fouls … He played against Dani Alves, that was a real battle, believe me. It’s worse to watch.”

Arsenal have a potential defensive headache before the trip to Vicarage Road, with Shkodran Mustafi likely to be out for six weeks after suffering a thigh injury in Germany’s win against Azerbaijan on Sunday, Sead Kolasinac struggling with a sore hip and Laurent Koscielny facing a late fitness test on an achilles problem.

“I will completely decide what I do tomorrow because Koscielny will have a test then,” Wenger said. “He worked quite hard physically, he looks like he is capable of playing if he survives the test. If he has no pain on his achilles tendon, he can play. The player I least expected to lose during the break was Mustafi. First of all, I was not sure he would play. Secondly Germany had already qualified so I didn’t expect him to be out injured as the games would be less intense. He didn’t play in the first game and we lost him in the second game against Azerbaijan at home. We have to cope with that now.”

Wenger questioned the proposal by Sky Sports to move Arsenal’s home game against Liverpool to Christmas Eve.“I know that we have to adapt to the schedule dictated by TV,” Wenger said. “If that happens, I think no game should be played after 2pm. I would prefer to be at home on Christmas night and celebrating. I still feel that could happen if we play early.

“You wouldn’t want to sacrifice your evening with your family. But that isn’t considered any more. People want to watch football during the Christmas period.”