A secret review of the much maligned Super Rugby competition has recommended Australia and South Africa axe one team each.
The Sydney Morning Herald has revealed the recommendation for a new 16-team Super Rugby model was presented to the Australian Rugby Union board last week.
The news outlet claimed other proposed models were also being looked at including the possibility of South Africa losing two teams. Another version actually advocates expanding the tournament even further.
The revelation comes as the Sanzaar joint venture plans out its next 10 years around a competition that is lucrative yet deeply unpopular among fans over its current 18-team format.
Consultancy group Accenture is driving the review but is still at least two months away from settling on a preferred structure.
The Herald reported that Accenture has just completed a lengthy consultation process with 28 stakeholders, including the 18 current teams, the national unions from Australia, New Zealand, South Africa, Argentina and Japan, plus the host broadcaster from each country.
The news outlet claimed the ARU board spent considerable time at its meeting discussing the prospect of Australia surrendering one of its Super Rugby licences in time for the 2018 season. A 16-team competition could be played under a more workable four conference format.
The Herald nominated the Perth-based Western Force as the most likely victims but said any move to axe them would "represent a major strategic retreat by the ARU from its commitment to a national footprint".
But it noted the ARU will need to consider the dire action as an "immediate solution to rugby's intractable financial problems".
"Less than a year after the new SANZAAR broadcast deal delivered the ARU a record $A285 million cash injection over five years, the celebrations have come to an abrupt end," said the paper.
"The ARU has informed the five Super Rugby franchises they can expect a $A500,000 funding shortfall from head office next year, while the ARU searches for a new sponsor for Super Rugby and gets to grips with the true financial picture at the Western Force and the Brumbies."
The Herald pointed out that the ARU did not secure a naming rights sponsor for the June Test series against England, or this year's Rugby Championship. And also that the Force were bailed out by $A800,000 of additional funding from head office, the Canberra-based Brumbies also have significant financial issues and the Waratahs reported a small $A100,000 profit last year.
In addition in Melbourne the Rebels are being propped up by private owners while the Reds are embarking on a re-building phase with a new coach and chief executive after posting a loss of more than $A1 million last year.