The main issue here seems to be one of viewpoint.
UEFA (via PWC) have assessed our accounts and deemed us to have failed FFP.
We had our accounts assessed by Deloittes amongst others and they deemed our accounts to have passed FFP.
UEFA are trying to punish us as they say we've failed.
We don't believe we've failed at all.
However the process UEFA have in place has no element within it to challenge the decision on FFP, all we can do is challenge the punishment they are trying to apply.
Why, if we don't believe we've failed at all, should we accept any form of punishment for failing?
As UEFA don't actually provide a forum by which we can challenge the pass/fail decision on FFP (just the punishment on failing) then we surely have no real course of action other than to go to the Court of Arbitration for Sport (CAS) and challenge the way in which UEFA have applied the rules. The 2 key elements to this would be the Etihad deal and UEFA's (believed) decision that this is a related party, and inflated value one at that, and the (believed) exclusion of the sale of Intellectual Property. CAS should be able to make a decision, based upon UEFA's own FFP rules, as to whether the Etihad deal should indeed have been classed as a related party one (I simply can't see how UEFA can view it as one when their own measures are identical to the ones used in most western countries, and which clearly demonstrate it NOT to be related). They should also be able to decide whether the value of the Etihad deal (£40m p.a.) was inflated (again I can't see how they have reached that decision given DHL paid United £10m a year to sponsor their training kit only, and AON have signed a deal worth circa £20m a year to sponsor United's training ground only). CAS will also be able to see whether or not the removal of the IP sale is something UEFA is able to do within the FFP rules they've followed (there is nothing, as far as I can tell, that specifically allows them to do so. The only potential loophole they may have used is to deem the IP sale to a "third party", whom City will not confirm the identity of, as a "related party" as they are unable to confirm that it is not a related party without knowing who the third party actually is. However, even in this scenario, you'd have thought a suspended punishment, until such time as City are able to announce the name of the third party, and an accurate assessment of their "third party" status, or lack thereof, could be made, would have been a more apt punishment to apply).
City didn't really want to go down the legal challenge route, of that I'm certain, however UEFA seem to have given them no choice. UEFA may very well live to regret this hardline stance on City's FFP situation, they've poked the tiger with a stick a little too hard, they will need to be prepared for a ferocious response.