While I’m inclined to say Fuck NZ and go it alone, I don’t think now is the right time to do that. Firstly, there just isn’t enough time to establish a pro domestic comp in between now and the start of the season - a lot of research needs to go into the proposed teams, they need to be funded, etc. Secondly, RA needs test rugby to generate revenue and there is going to be fuck all of that over the the next 12-18 months. So we wouldn’t be able to pay the players.
If NZ are going to play hard ball and insist on 2 teams I’d say run with it for next year. There are a few reasons for this. 1) RA has stated it’s intention is to focus on keeping the top 30 or so players, and a similar amount of developing players. In going with 2 teams they can keep 70-80 across two pro squads. 2). NZR will see pretty quickly that 5 NZ franchises are going to get rogered by 2 Aussie ones and will soon have a change of mind. 3). They’ll also realise how important Australian money is for their survival. 4) This comp would mostly be in lieu of test rugby for next year. 5) Having 2 Australian teams performing strongly could reignite interest in the sport ahead of a possible domestic comp.
The two teams will have to be Qld and NSW, this has to happen to keep the interest of 90% of the fan base, merging sides would just be too confusing and would do more harm than good. The Brumbies, Force and Rebels would just have to be parked for the year.
Meanwhile, remaining players would return to club rugby and possibly the proposed national club comp, while in the background a pro domestic comp is being formulated and built.
Note this a Covid recovery for next year only, not a long term proposal. The only way I can see a domestic comp being financially viable from next year is to build it from the existing 5 franchises, but this will be completely reliant on private equity, the broadcast dollars just won’t generate enough to keep the players, and if we lose the players no one will watch it. It will quickly go into a death spiral.