It isn't the peanuts, mate, it's the principle.
We had them over a barrel and settled for less than we wanted up front, if that quoted price is true (and I highly doubt it is) - if that's true, we obliged City. You can say we did it to give Poch funds to play with or time to bed in the new signings we will now presumably make, but that is the bitter tradeoff in the unlikely event that the fee is true - that we have signalled that we're willing to compromise in our quoted prices, and (by extension) negotiate with our rivals when it comes to them signing our players.
It's not the peanuts, as I said - it's the principle.
According to Iheanacho's agent, City did not want to sell to a rival at any costs, so any deal with the likes of us was out (I believe he said this last month while taking about a move to West Ham or something). We apparently can't be as obdurate with City, but if we also deem to lower the price of our players in the bargain...it rankles, is all. Mind, I really don't think it's true.