The Welsh Rugby Union has today issued a statement confirming major change is coming after its proposed new Professional Rugby Agreement (PRA) failed to be accepted by all four teams. The WRU has now triggered the two-year notice period on the current set-up and said the future landscape will not see four evenly funded teams. WalesOnline revealed on Saturday night the WRU has informed the four teams it plans to reduce the number of teams to three , with that process beginning this summer. How that plays out is far from certain, with two teams merging one potential option that will be explored. The seismic development comes after the Ospreys and Scarlets refused to sign the new agreement following the Union's takeover of Cardiff . Sign up to Inside Welsh rugby on Substack to get exclusive news stories and insight from behind the scenes in Welsh rugby. The WRU has activated the two-year notice on the old PRA because it is desperate to refinance its debt - something the new PRA would have done. NatWest view the old PRA as too much of a risk to refinance the debt because any increase in the WRU's profit has to go to the four professional clubs. The WRU says it has not taken the decision lightly and recognises the game is now entering a period of huge uncertainty. A statement on Sunday morning said: "The Welsh Rugby Union confirms Ospreys and Scarlets did not sign the new Professional Rugby Agreement (PRA25) by the deadline that was set. It has therefore taken the difficult but necessary decision to issue the formal two-year notice to terminate the current PRA agreement in order, in particular, to proceed with its debt refinancing. "Dragons RFC and Cardiff Rugby have signed up to the terms of a new agreement (PRA 25), which had been under negotiation since August 2024. The One Wales Strategy was designed to create a more aligned, financially sustainable and competitive future for professional rugby across Wales. The WRU’s preference from the outset was to maintain four professional clubs (on equal funding) within this framework. Everyone worked hard to achieve that. However, agreement on the new PRA 25 could not be reached with two of the professional clubs. "This is not a decision that was taken lightly, however given the WRU’s duties to the game in Wales as a whole, the broader performance, financial and strategic needs of the game must take precedence. In practical terms, the WRU will work closely with all four professional clubs to agree the way forward beyond June 2027, with an open mind to all constructive and realistic proposals. "That said, given the seismic changes in the rugby landscape since we first started negotiating PRA 2025, the system will not return to the model of four evenly funded clubs." WRU CEO Abi Tierney said: “We are continuing to talk to all four clubs about what the future will hold. We recognise this will be time of uncertainty and are committed to treating all the clubs, players, and supporters with respect and fairness throughout this process.” “We acknowledge the continued commitment of each club to Welsh rugby and will formulate a new plan with the best interests of the whole game in Wales at the forefront of our thinking. "When I announced the headline strategy back in July 2024, I said one thing is for certain, given the challenges facing rugby in Wales and globally, there will be times when we need to adjust our course. We must seize this opportunity. “Our continued aim is to build a resilient and world-class structure that will support Welsh rugby’s next generation and beyond.” Professional Rugby Board chair Malcolm Wall added: “The next phase of consultation, as always, will be conducted with the best interests of the whole of Welsh rugby at its heart.”