Negotiations between Real Madrid and Pepe regarding the new deal have hit a standstill with the issue unlike to be resolved any time soon.
The Portuguese wants €5 million per season if he is to sign a contract extension, while Real have offered him a deal until 2015 that will see him earn €3.5 million per season.
Unless the two sides reach an agreement, Pepe would be available for free when his contract expires in 2012, leaving Real €30 million short as that is the amount they paid for him in 2007.
Cashing in only €1.8 million a year, the Portuguese defender is one of the lowest earners in the club and he obviously wants parity with some of the big stars like Benzema or Casillas.
The club officials are also negotiating a new deal with Sergio Ramos even though his contract does not expire for another three years, with the Spain international also expecting a pay rise as he currently earns €3.5 million per season.