The proposed agreement was meant to form a key component of the WRU’s long-term plan, which it has called the ‘One Wales’ strategy.
BBC Sport Wales learned that if the three independent regions failed to sign, the WRU would consider options that could lead to lasting structural changes in Welsh professional rugby.
One possible outcome could have seen the number of Welsh professional teams reduced, despite chief executive Abi Tierney repeatedly expressing her commitment to retaining all four regions.
The WRU holds the licences for the Welsh sides competing in the United Rugby Championship (URC) and European competitions.
The union has the authority to revoke those licences after serving a two-year notice period, though they would be heavily penalised financially if they did not continue to provide four sides for the respective competitions.
The independent clubs had voiced concerns that, under the proposed agreement, there would be no clear limit on the level of investment the WRU could allocate to Cardiff, potentially placing the other teams at a financial disadvantage.
The WRU’s acquisition of the business and assets of Cardiff cost £780,000, with the national governing body also committed to putting about £1.2m into the capital-city region until June 2026, meaning a total outlay of about £2m.
