Over at the BBC, David Ornstein is reporting that Arsenal's contract extension talks with Theo Walcott will continue into the new year, despite Arsene Wenger's previous insistence that they be sorted out by Christmas, which, obviously, they haven't.
Ornstein reports that
Walcott's preference is to stay with Arsenal if they meet his wage demands and offer him opportunities to play as a central striker having spent most of his Gunners career on the wing.
Yet, the crucial difference between Walcott and Arsenal is that Walcott wants closer to 100,000GBP/week, while Arsenal want to only offer 75,000GBP/week. Arsene Wenger thinks that Walcott will be part of the long-term future of the club, responding "I think so, yes" to that question, though it must be noted that Wenger made similar remarks when asked about the future of Cesc Fabregas, Samir Nasri and Robin van Persie.
Keeping Walcott, though, would be a plus for Arsenal. He is Arsenal's top scorer this season, with 10 goals and a further 7 assists in all competitions. His finishing looks far sharper than it has been in other seasons, and Arsenal have been far better with him in the team than without him; he gives Arsenal a pacy, direct option that Gervinho doesn't offer. Alex Oxlade-Chamberlain has been mentioned as a possible internal replacement, but he's still very inconsistent, and it could only be considered a downgrade if he were to replace Walcott.
If it's true Walcott wants to stay, Arsenal should probably give him close to what he wants, in terms of wages. They offered a similar amount to Samir Nasri; statistically, Walcott is far better than Nasri, and, being young and English, is also far more marketable.