In lay terms, City have been really really dumb and almost gone out of their way to make no attempts to cover their tracks. That is the only reason they are in trouble. On the flip, even in spite of this they know the law just does not stand up to ECHR regulations. You cannot legislate for unfair competition and honestly expect that not to be overturned at a legal level.
I mean I know I used the tennis analogy but I will do so again. Imagine if the WTA said, for fairness they are going to limit the amount players can spend on travel, to stop some players going first class and others having to bunk in the back of a truck. They could probably get away with it (difficult but they'd probably be ok). If you then started to say though, that you are actually allowed to spend more, depending on your revenue that year this wouldn't work. This seems to then be doubled down upon, by saying that if player y acquires the sponsorship of player x to allow them to then spend as much, they are going to penalise them. Any court is just going to say thats a racketed in breach of the founding principles of law.
In this case, if a tennis player said, do you now what, I'm being the same plane ticket as Rodger Federer, if they were punished for doing so, it just wouldn't hold. Forget that they signed up to private games rules, those things hold no power once you move into the legal field.
City seem very confident to me. I don't think they care as much about the mud thrown at them. It is not their job to be liked, respected and judged as a credible arbiter. If they look like cheats, it really doesn't matter. Most people hated Manchester United and thought they were cheats, it has no relevance. UEFA it does though. If they look to be tarnished it eats away at their credibility. We all expect a rule making and arbiter to be above that.
I think City know they can take this deep, and credibility is hit for UEFA. As it's credibility is hit more, more pressure comes onto FFP. If FFP falls they have all manner of problems. Firstly the City's of this world start spending enormously again, and they may also then sue to say the system never worked to begin with (even if they lose this the first time round). Secondly the more traditional elite clubs are going to kick off big time, as any controls they have disappears, expect enormous pressure for a break away super league.
This might sound really outrageous, and it's by no means the most likely model but don't rule out FIFA (or an alternative association) licensing such a league with a handful of their own teams. North America, or the Gulf association could well consider it. Bring 12-14 across and have 4-6 of your own teams. Franchise it, give Juventus a base in a major America city where they can play some games. We are already seeing some African and Oceanic team playing home fixtures in Europe. It seems a big stretch but it's really not.
This is high stakes poker. If I'm honest I think UEFA look quite hysterical in this episode and are panicking a bit. I think settling this issue and getting city to play better lip service to a set of rules that are probably unenforceable and exist on the basis of good will is their best ploy. It will mean being prepared to treat City as a bit of a test case though.