Cardiff Rugby served formal notification on Tuesday that they intend to enter administration, in a further setback for the 15-a-side code in Wales.
The Welsh Rugby Union, however, appears poised to support the capital club.
"We are aware Cardiff Rugby have confirmed notice of intention to appoint administrators," said a WRU spokesperson said.
"And we are working closely with the Cardiff board and the administrators to safeguard the future of professional rugby in Cardiff."
A Notice of Intention (NOI) was filed in court on Tuesday, effectively giving the club two weeks to explore options.
Meanwhile, a Cardiff statement said: "Cardiff Rugby can confirm notice of intention to appoint administrators has been filed.
"Please rest assured that everything possible is being done to protect our employees and the future of the club. We have a plan in place and we will update you as soon as possible."
Investment group Helford Capital Limited purchased a majority shareholding just over a year ago with Cardiff and Wales great Gareth Edwards appointed club president.
Tuesday's announcement will raise fresh questions about the viability of professional club rugby in Britain given former English Premiership clubs Worcester, Wasps and London Irish all entered administration during the 2022/23 season.
None of those three teams have yet returned to competitive rugby, although Worcester are set to be back in the professional game next season as part of the new 14-club Tier 2 league -- which will be the division below the Premiership.
Cardiff, however, play in the multi-national United Rugby Championship and are next due to be in action on April 19 as part of 'Judgement Day', which sees all four of Wales' professional regions in action at the Principality Stadium.
Cardiff are due to play the Ospreys, with the Dragons facing the Scarlets.
The uncertain financial situation at Cardiff comes hot on the heels of a miserable season for the Wales national men's team, who ended the Six Nations with a second straight wooden spoon.
Wales have lost 17 successive tests, a record for a Tier One nation in the professional era, stretching back to the 2023 World Cup.
Club rugby is also in the doldrums, with none of the Welsh regions qualifying for this season's European Champions Cup.