Still think we would be leaving this well alone if the homegrown aspect wasn't involved... but it is, we have to deal with it and Sterling is the best possible option for doing that, so go get him City!
Luckily for Liverpool he still has 2 years left instead of 1 but we should be looking closer to the £30 million mark instead of the reported £50 million. Liverpool have shown recently with Suarez how they can act like a desperate ex clinging on to their star players and refusing to sell when they categorically state they no longer want to be there. Show some dignity and just let him go. I'd definitely be dangling Jovetic and/or Dzeko as bait but please don't under-value them, they're easily £20 million players in the context of a player+cash swap.
This could have an impact on Milner too. If you were Milner now and you saw the only decent talent at the club you are seemingly destined for ask to leave, you'd surely have to have a serious rethink? Whether that's signing for Arsenal, signing a new contract or somewhere else, Milner would have to be mad to go there.