Instead of cutting two Sydney teams in my opinion it would be better to relocate a couple of teams over a period of about 5 years.
I like the ring of The Western Panthers (but I guess it could be Western Tigers), playing most home games out of Perth Stadium, but at least five games a year (home or away) out of Pepper Stadium (or Parra Stadium). If it was done well enough, with support from the NRL, the Panthers Rugby League or Tigers Rugby League could surpass Brisbane Broncos as the biggest football club in Rugby League.
Same could be done for Southern Sharks with, say, 8 games out of Adelaide and at least 5 games out of Shark Park.
If the NRL dangled the carrot of an extra million (or more) a year over ten years in club grants there would be a point that the Clubs would consider it.