The point is that, with some reallocation of playing/coaching resources, they would be competitive with each other. It is not necessary for them to be competitive with NZ sides or any others whom they are not playing. So long as we can keep most of the best (test) players involved, the Wallabies will still be competitive on the world scene.
Although the suggestion was for the winners to play NZ and Japan ultimately in a champion play off, with a severely weakened product we would be destroyed by NZ teams. This would further reduce the spectacle and also the value to prospective PE and Broadcasters.
There are a number of layered issues I see with a solely domestic product.
Our current TV deal of $57m a year was pooled with SA and NZ as part of the SANZAAR agreement. Our TV deal was the least of the three which meant the actual money RA received from TV revenue was higher than $57m a year. Despite this, there was barely the money to fund 4 franchises in Australia as well as support the Wallabies, 7s etc with RA well reported debt levels needing significant bailout from WR (World Rugby) to stay solvent.
With a reduced TV deal and/or PE investment of which we are at the mercy to take whatever is offered with little alternative, how can we honestly think we can go from barely running 4 franchises to supporting 8? PE firms are there to make money they wont throw good money after bad to make a weak product weaker by diluting the product across more teams. Secondly, with the proposed 8 team structure are we thinking that it will operate as a beefed up version of the current 4 team format ie. same salary cap etc? Again I cant see a PE group willing to double the current outlay, or close to it, when the tv deal wont support a return. Should the Salary cap then drop across the domestic competition then most of the best (test) players you refer to will follow the lead of the QLD 3 and head abroad to maximise their earning in their short career window. Which further weakens the product and value.
No doubt a domestic product could appeal to fans, although how and where these teams are formed could be an issue as with no history and limited buy in we are essentially making the NRC our second tier rather than third which could further alienate rusted on fans of the current teams. I doubt there would be little commercial value in that.
Im also worried by the truth of your statement "It is not necessary for them to be competitive with NZ sides or any others whom they are not playing" NZ sustained success as international level has been based primarily around the fact their their domestic teams are there to best prepare their players for national duties. I also cant see how, even in the event a PE throws ridiculous money to run an 8 team comp which can afford to pay our top players their current salaries to keep them here, that playing in a weakened comp with many players lower than the current super quality how that will help prepare the Wallabies for a larger step up to test rugby. We could see our 7th ranked Wallabies a highlight.
The catch 22 of less funds ie. salary cap, more teams with weakened competition and an exodus of test players is that it would no doubt lead to further calls to scrap or reduce the Giteau Law which in turn would allow more top tier or upcoming talent to head offshore to stronger leagues, further weakening the domestic product. The end result could see the domestic comp much like the A-League soccer, a quick stop for developing players or one to completely by pass on their journey to the top of overseas markets and our national team is almost entirely selected from overseas players who rarely set foot on home soil.
