The Welsh Rugby Union (WRU) has stated there is no realistic prospect of the game generating enough revenue to fund four professional teams in the country beyond 2028.
The WRU's board has released a lengthy statement after former Wales captain Jonathan Davies called for them to step down.
There has been a concerted attempt to try to oust the WRU board this week.
Businesswoman Hayley Parsons called for them to stand down before Davies' intervention, while former Principality Building Society chief operating officer Rob Regan has offered to oversee an interim board.
The WRU board statement has not directly addressed these calls for them to resign but has stated "the kinds of personal insults and attacks that have become far too commonplace are unacceptable".
Welsh rugby's governing body has recently doubled down on outlining its plans to cut the number of professional teams from four to three by 2028, with WRU-owned Cardiff and privately backed Dragons set to be given licences.
That announcement has plunged the futures of Scarlets and Ospreys into doubt, with the west licence either being awarded to the Llanelli-based side or their Swansea-based rivals.
WRU chiefs have said the process to decide the framework for the final decision will begin in December and finish before the end of the 2026-27 campaign.
Scarlets managing director Jon Daniels has insisted there are no plans for a merger with Ospreys and called for greater transparency from the WRU.
Ospreys have since responded publicly by stating they believe four professional sides is the way forward, telling the WRU its plan to reduce a team is wrong and not inevitable.
The WRU board statement says they "have worked closely with the leadership of our men's professional teams to address the financial and performance challenges facing our sport."
The board stated: "There is no realistic prospect of the game generating enough revenue to fund four professional teams competitively beyond 2028.
"The available finances, and the player base needed to sustain them, are spread too thinly across four teams to give any of them what they need to succeed."
The WRU point to the extraordinary general meeting (EGM) held in April where they say the member clubs came together and were provided with a transparent update on our plans to address the challenges.
They say the clubs were given the opportunity to raise questions and provide comment on the decisions that we as their board have taken.
The statement continued: "Since then, and following the extensive consultation process undertaken last year, the WRU board has reconsidered in detail a range of factors when determining the future operating model for the men's professional game.
"These have included population and accessibility, rugby infrastructure, financial sustainability, player pathways, sporting performance, fans' support and heritage.
"As a professional, responsible group of individuals with the same aim, we have affirmed the difficult decision to move to a three-club model.
"The new model is designed to develop a strong and sustainable professional structure and a pathway system that gives future players, across our rugby strongholds, the best opportunity to develop.
"All involved in the leadership of our men's professional game - the WRU and the four current clubs - have agreed to come together later this year to begin shaping what the future licensing arrangements for the new model will look like."
The WRU state that there has been unacceptable personal abuse aimed at individuals within the governing body, after chief executive Abi Tierney has been previously targeted on social media.
There are 11 members on the board following the departure of chair Richard Collier-Keywood in March 2026.
Tierney is joined by interim vice-chair John Manders, independent directors Jamie Roberts, Jennifer Mathias, Andrew Williams, Alison Thorne and Amanda Bennett, elected members Claire Donovan, Chris Jones and Colin Wilks and interim Professional Rugby Board (PRB) chair Marianne Okland.
"The WRU board recognises the significance of the changes proposed, and we have and will always welcome constructive input," said the statement.
"We are not deaf to criticism, but it has to come with credible alternatives. The kinds of personal insults and attacks that have become far too commonplace are unacceptable.
"As a small rugby nation, we need to work together - continuous cycles of unwarranted and unnecessary infighting will only make us weaker.
"Whatever your views about what is best for the future of Welsh rugby, there is no justification for the highly personal insults and attacks that have been recently directed at members of our staff and at the WRU board."
The process for replacing Collier-Keywood is ongoing, but the WRU has indicated the successor for the independent chair role will need to support the three-team proposal.
