The Welsh Rugby Union (WRU) has announced plans to cut back on its number of professional plans, aiming to slim down from four to three by 2028.
For now, the current four regional teams will remain in place until 2028, after which the body is planning to sanction three equally-funded professional teams, one in the west, one in the east, and one in the capital of Cardiff.
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These three sides will be joined by two professional women’s sides, and receive equal funding of a base £6.4 million ($8.5 million) per year, which would soon rise to as much as £7.8 million under a new financial system.
Currently, the WRU has four teams, each representing a region of the country and drawing from that catchment area, which compete in the United Rugby Championship (URC) competition: Scarlets (Llanelli), Ospreys (Neath/Swansea), Dragons (Newport/Gwent), and capital-based Cardiff.
All four of these teams will continue in the URC through the end of the 2027-28 campaign, with WRU liable to significant financial penalties if a side were to withdraw before then.
Given that Cardiff is the capital side already (and that it is owned by the WRU after falling into administration in April 2025, and the fact that the Dragons are perhaps the most sustainably operated side (the club is the only one of the four to post a profit in 2025), means it is likely Scarlets or Ospreys are in danger of losing their license.
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By GlobalDataGlobalData Sport associate analyst Tom Subak-Sharpe explained: “Beginning with the 2028/29 season, the Welsh Rugby Union (WRU), under the leadership of their new director of rugby, Dave Reddin, will operate with three regions: one in the west, one in the east, and another based in Cardiff.
"The Ospreys are currently redeveloping the St Helen's Sports Ground in Swansea, which will be the team's permanent home by the start of the 2026/27 season. The Scarlets, located in Llanelli, are the most likely candidates to be cut. There is however a possibility that both the Ospreys and Scarlets could merge to create the WRU's western team; such a merger would likely be a lengthy and complex process.
He continued: "The uncertainty surrounding the future of Welsh rugby has already had a profound impact on its commercial landscape. The Ospreys, for example, have faced significant challenges, including financial losses and a struggling sponsorship market, as potential investors remain wary of the club's future.
"Regarding the WRU, the federation has implemented a cost-cutting strategy and is now poised to enhance commercial revenues, ensuring the financial stability and future growth of rugby in Wales. One area where improvement is essential is ticket sales; as of October 11th, over 82,000 tickets remained available for the men's four Autumn International games, highlighting the considerable work ahead to rekindle fan interest after a difficult two years on the field.
"For the WRU, positioning the national team to compete for Grand Slam titles once again is crucial for driving commercial success. This effort will help attract new sponsors who are committed to the long-term vision of Welsh rugby, which includes both the men's and women's national teams ranking in the global top five rugby nations by 2029."
Crucially, the WRU has not yet explained how the selection will take place. Speaking on the announcement, WRU chair Richard Collier-Keywood revealed: “We want to involve the URC and the owners and managers of the current clubs in how we get to our chosen destination. This may take some time, but we will work hard to get this done as quickly as possible.
“If, however, it ultimately proves impossible to reach a consensus on how this change will happen, then the WRU will run a fair and transparent tendering process for the three licences. We have already guaranteed that all existing player contracts will be honoured.”
The WRU had previously stated its ambition to cut down the number of teams to just two, but after a consultation period, it seems to have settled on three as the optimal number.
What remains up in the air is what Welsh rugby professional competition will look like in 2028 and beyond.
Subak-Sharpe continued: "The announcement by Dave Reddin that the WRU plans to continue its relationship with the URC will be a significant relief for the competition, which currently features teams from Ireland, Italy, Scotland, South Africa, and Wales. There has been pressure from fans and Welsh rugby influencers for the federation to pursue the formation of an Anglo-Welsh league with Premiership Rugby clubs. This would create opportunities for cross-border rivalries and could play a major role in attracting larger crowds.
"The departure of Welsh teams from the URC would have severely impacted the league's commercial appeal, including its media and sponsorship opportunities. The league's current viewership has been strong, as the URC's 2024/25 season recorded an 11% increase in total viewership, reaching a cumulative audience of 53 million. This marks the fourth consecutive season of record-breaking television audiences. Maintaining the league's team structure will be crucial for the URC as it aims to become one of the most attractive and rapidly growing commercial entities in the rugby landscape."
This announcement comes after years of financial struggle for the body, which reported a loss of £11 million in the fiscal year ending June 30, 2024, having lost an even greater £18.5 million the year prior, and having accrued a total net debt at the end of that year of £129 million.
Despite this, the body, in the same announcement today, has also committed to £40 million of investment into the game in the country from elite level down to grassroots, to be dispensed across five years.
Back in September, WRU chief commercial officer Leighton Davies revealed that the body is set to refinance close to £30 million of its debt with a pair of new lenders, granting it both a short-term facility of four years and the ability to agree a new long-term debt agreement.
The body may also seek to draw down new funding from securitization against ticket incomes over the coming years, which may be used for this investment.
Davies also revealed that profits from the 75% WRU-owned Parkgate Hotel project, adjacent to the Principality Stadium, are now also at a level to be reinvested into the body.
