The Saudi club, who beat Sunderland to the signing of Marcin Bulka earlier this summer, were one of the clubs rivalling the Black Cats to the capture of the ex-Arsenal midfielder and made contact with Bayer Leverkusen.
But fresh reports claim NEOM are refusing to pay any more than €8m, with talks having now broken down.
That is good news for Sunderland, who are in talks with Leverkusen after making their interest known in the 32-year-old midfielder.
But the development with NEOM, as first reported by transfer specialist Sacha Tavolieri, doesn’t mean Sunderland are without competition for the Switzerland international.
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Fenerbahçe are showing an interest and have also held initial talks with Leverkusen, but it’s not beyond the realms of possibility that Xhaka could end up staying with the Bundesliga club.
Sunderland have already added Noah Sadiki and Habib Diarra to their midfield ranks this summer, but the club’s coaching and recruitment team feel Xhaka’s top level experience would be pivotal.
Jordan Henderson was available this summer but Xhaka is three years younger and was identified as a preferred target, with Sunderland willing to offer the midfielder a three-year contract. Sunderland have also been linked with a move for Napoli midfielder Frank Zambo-Anguissa.
Amid the uncertainty surrounding Xhaka’s future, Leverkusen and Germany midfielder Robert Andrich told Bild this week: This is a matter between him, his management, and the club.
“In the end, Granit will know what’s best for him. It’s completely normal in football that unforeseen things sometimes happen. I can’t say much about that. I’m not his advisor. I’m not his agent. Anything can happen.”
Earlier this week, Leverkusen’s sporting director Simon Rolfes said: “There is interest, but nothing has become concrete so far.
“Of course, we’re now in the phase where we’re finalising the squad – that’s obvious. Granit plays an important role in that, which is why it certainly won’t be an issue that drags on throughout the entire transfer window.
“There will still be some changes in the squad overall. But at some point, the squad has to be 95 percent complete – and Granit is an important part of that. So there will definitely be a decision sooner rather than later.”
