Contend, when you arrive, with the favourite in it (7)
I believe the answer is:
compete
'contend' is the definition.
(I know that contend can be written as compete)
'arrive with the favourite in it' is the wordplay.
'arrive with' becomes 'come' (synonyms. I am not sure about the 'with' bit.).
'the favourite' becomes 'pet' ('pet' can be a synonym of 'favourite').
'in it' is an insertion indicator.
'come' going around 'pet' is 'COMPETE'.
'when you' is the link.
I am not very happy about this link. Some or all of it may be part of another bit of the clue.
Can you help me to learn more?
(Other definitions for compete that I've seen before include "Contend, vie" , "Take part in contest" , "Strive (against others)" , "Vie, contest" , "Contend (for a prize)" .)