I'm suggesting Cronulla take over the St George/Wollongong area, not merge with the Dragons. I'd have the Dragons relocate to Adelaide.
South Coast Sharks
Southern Sydney Sharks
Sutherland-South Coast Sharks
It could be a giant club that rivals Penrith and the Broncos.
Roosters and Sea Eagles could merge. Sydney Sea Eagles, maroon, blue and white.
That's still not going to happen, as Cronulla won't be able to service illawarra and the shire, and the Dragons kind of are, if your looking to drop the amount of Sydney teams then a permanent move to WIN stadium for the dragons would work, and a relocation of another to CC, and if your saying that penrith is on the outskirts country that would leave 6 clubs in the metro area.
My preference has always been roorters to CC, or a properly merged Bears and Easts, to be North Sydney Roosters, and share CC and SFS as dual homes, much like Dragons are with Ilawarra and kogarah, This will gain juniors clubs for the roosters, and service central coast, and also service northern suburbs of Sydney
If anyone is more in need of relocations its more likely Manly to Adelaide, but only if the Roosters broaden themselves to service the North, if they stay put as the "city" team, they probably should move to Adelaide instead as they do nothing for the game where they are