It's not Palace's decision. It's Mateta's. If he won't sign a new contract then he simply must be sold, even if he's by far our best striker (he is). We've been through all this with Guehi.
Us being in the Europa League may tilt him towards signing a new deal, but only a bit. For one thing, any new club he would sign for would probably be involved in at least that level of competition, if not the Champions League. It's not like we are his only shot at Europe.
Plus, we are in Europe until we are not. Christmas time? February? Perhaps we will win the Europa League, or get back into it by winning the FA Cup again, or qualify through the league. Its possible, anything can happen. Not very likely, though, is it? In fact, so far these things tend to happen once a century or so. Compare that to the chances of Milan (or whoever else is interested in him) being in Europe every year. I know which one I'd bet on.
More than that, he is nearly 29. It's now or never to get to the big time. He's put the work in at Palace, could scarcely have achieved more for us, and has earned his shot. I'm sure he loves playing at Selhurst, but we are talking about wearing the red and black of Milan, playing at San Siro... To get to the end of the road in a few years time and have not experienced that when you could have done....
If PSG or Arsenal or someone want him, he should think twice. They will stick him on the bench, he will lose confidence, rhythm, form, fitness, and his place with France. But that's the attraction of a Milan, I should think. He gets all the glamour and prestige, regular European football, a decent wage, but they are not so rich that they can buy Mateta and add him to the pile. He'll have a good chance to be No1 there.
I just can't see what we can offer him that he can't get, plus more, somewhere else. He's already told the club in good time that he doesn't intend to renew, so for him to stay would not only require the balance to tilt in our favour when he weighs his options, it would require him to reverse a decision he has already made. I just can't see it.