They've tried. And to merge with the scarlets and Ealing. They've been trying to get out for ages. Ospreys has been just chucking money into a pit for them. They obviously believe Cardiff offers more opportunity, and to be fair, in rugby, it probably does.
It's not like when we (SCFC) were going down the tubes. The FA (nor FAW) wasn't trying to actively put us out of business for their own purposes. The Ospreys have been given proper contractual notice ending in 2027. If their owners decline to bid for the single licence available in the west (and, of course they won't; WRU made sure of that by awarding them cardiff) then there's nowhere left to turn. The WRU's view will be that it's not killing rugby in Swansea at all. It's killing current support of 4000 people but the pathways for youngsters that want to play, will still be available 10 miles down the road, or 30 miles east. Swansea will simply become part of the western region...presumably the Scarlets.
I know...I think it's a pile of old pony too, but there it is, that'll be the rationale. It's interesting to see what the council might do, but I think it's just trying to gain political capital in 'we tried our best'. I'm no competition law expert but they look pretty much powerless to me, even though it stinks.