I dont disagree to a point, but consider for example since the introduction of your team to the afl in around 1990 that Melbournes population has grown from 3.1 million to 5.0 million today, and is expected to keep going.
Whilst a case could be made at this stage to relocate or merge up to 3 - 4 Melbourne based teams, the afl will be very cautious rationalising its heartland when the market is still growing unless it can as a minimum break even. It cant afford losing the majority of 40,000-50,000 members and 100,000s of fans per smaller club at the moment.
Between them, St.Kllda Bulldogs North and Melbourne represent a current market at least equal to any non Vic state. Its alot to lose even if you ignore the hurdle of tradition.
Maybe one team could be relocated to Tassie if the fans in Vic were looked after but unless things get reall grim i dont see much more happening at the moment. Longer term, could be a different story.
This is an aside, not exactly on topic but hey.
I know nothing of how Melbourne is laid out, how spread out it is etc.
One of the things that did the WAFL no favours over here was when the population here grew, the city spread right out (road city like Los Angeles), all the traditional WAFL clubs were inner city and this led to the comp losing a bit of relevance, despite the larger population.
Like I said, I don't know how this has played out in Melbourne, is that population growth conveniently situated/as into the footy as in previous years?