One example of the politics in Sydney, the Souths debacle was another.
I guess I see Souths as almost the opposite situation to Norths in a way, getting rid of Souths is probably the poster child of the NRL trying to fix the "Sydney problem" and then getting forced to give in to the Sydney politics.
Prior to the rationalisation Souths were a basket case both off the field and on it where they were pretty much the easy beats for years. Geographically they are smack bang in the middle of Roosters/Dragons/Tigers territory and if emotion was taken out of the equation they were a pretty logical choice to go. I remember talks of a possible merger with the Sharks at the time and it would have made sense to be the actual southern Sydney team, but in the end they tried to go it alone and were cut.
In terms of support a large portion of that only came out of the woodwork once they were cut from the league, hell even now there's rumours of some of their memberships being gifted through charity.
Norths on the other hand whilst not setting the world alight on the field were still faring better than a lot of the Sydney teams at the time. Geographically were in a now underrepresented part of Sydney (population 1million +) and had embraced a strategic growth area in the central coast. Finances proved to be their downfall as well as fans not embracing the merged team and ultimately Manly struck and killed them off. I still find it harsh that teams had the "merge/relocate and survive" policy and Norths essentially did both and were cut.
I find it ironic that Norths is now Souths feeder team and expansion talks are for teams we already had less than 20 years ago.