The Welsh Rugby Union has confirmed it will cut one of its four men’s professional teams from the 2028-29 season, with Scarlets and Ospreys set to fight it out to survive.
The WRU says one of its teams will be based in the capital Cardiff, one in the west and the east.
It means one of the two regions in the west, Scarlets or Ospreys, will be defunct, with Cardiff and Dragons offered the respective capital and east licences.
"The WRU board has examined in detail a range of factors when determining the three future licence areas and has confirmed that only incumbent teams will be considered eligible for a licence," a WRU statement said.
The licensing framework and the licence award process will begin in December 2026 and conclude by the end of the 2026-27 season at the latest.
Professional Rugby Board chair Marianne Okland said: “This will allow an orderly implementation and avoid prolonged uncertainty for clubs, players, supporters, investors and sponsors.
"Assuming that Cardiff Rugby and Dragons RFC want to sign up to the proposed licensing terms, there is now certainty that they will be offered the capital and east licences respectively.
"We understand that there will be ongoing uncertainty until a final decision on the west licence is made.
"That is why we are committed to progressing in a collaborative way, whilst not underestimating the considerable challenges ahead, and providing stability for all at the earliest opportunity."
