From an Arsenal fans perspective, I think all avenues of this deal are still open. Although it seems City are favourites, I still think there's a chance for Bayern, and still a chance Arsenal will keep him for the year.
I know £50M is a lot of money, but Arsenal might feel the best way to get back in the Champions League or challenge anywhere near the top is with Sanchez in the team. It might just be seen as a gamble worth taking.
I know there's presedence with Clichy, Abebayor, Nasri etc but Arsenal were under more financial pressure to sell then. They aren't so much now, even missing out in the Champions League isn't what it used to be. They could easily try and move on different players if they need to. What we might do is similar to what Dortmund did with Lewandowski and try and make some sort of stand. Think it depends on a few factors though.
What we don't know is Sanchez state of mind. We don't know how determined he is to push a move through. What I would say is that it doesn't seem in Sanchez nature to not give 100% on the pitch, so maybe the club considers that when we are talking about keeping an unhappy player.
I also think it might come down to what targets Arsenal secure in the market first, this might help make a Sanchez sale less of a blow and they could absorb it a bit easier. If they sign Lacazette and Mahrez for instance, we might be more inclined to let him go more than if we were scrambling about the last week looking for the next Lucas Perez.