The cash-strapped Australian Rugby Union is considering a radical transformation which would see the Rebels, NSW Waratahs and Queensland Reds merge operations to form an eastern seaboard powerhouse.

The ARU's board met on Monday to discuss a potential new model of Rugby Australia where teams would pool assets and cut costs.

"[ARU chief executive] Bill Pulver has talked about challenges in the game and looking at ways to make it more efficient and more effective to deliver our programs," Clarke told SEN radio in Melbourne.

"But to think that a pure centralisation model is going to solve the ills of Australian rugby is an absolute joke.

"And if anybody went down that path, [they'd] be running an enormous risk of blowing up the game once and for all."

Clarke is also adamant the Rebels, who finished 12th last year with five wins, won't be cut from the competition when a new Super Rugby broadcast deal is negotiated next year.

"There are discussions around the broadcast and Super Rugby changing formats ... [it] doesn't mean the Rebels will be axed or combined into anything else, it couldn't be further from the truth," Clarke said.

The ARU controls the Rebels, taking the Melbourne club under its control last year after founding backer Harold Mitchell cut off his funding.

The new eastern seaboard proposal is still in early stages of negotiations, but it's aimed to make rugby a more powerful player against rival codes.

The Brumbies have indicated they want to wait before deciding if they will be a part of the structure.

But the Rugby Australia proposal is delaying the Brumbies' search for a chief executive.

Under the new structure, the role of club chief executive would be changed to be more like a team general manager.

It would also bring Australia a step closer to the centralised model used in New Zealand, where the five Super Rugby teams maintain control over their own administrative and membership operations but cede control to the NZ Rugby Union on issues including high performance.

The concept is understood to be driven by Pulver, using the commercial success of the Reds as a template for the new entity.

"As far as I know, no model has been articulated or agreed ... I don't think the Queensland Reds throwing their fairy dust around Australian rugby landscape will solve the ills of the game, we've all got our challenges," Clarke said.

QRU chief executive Jim Carmichael looms as the front-runner to head up the new operation.

'We had a positive ARU Board meeting on Monday, when we talked about the need to organise ourselves so we can implement an effective national strategy for Australian Rugby," Pulver said in a statement.

"The board gave me approval to continue to undertake conversations with our stakeholders and to fine tune the details of some of the potential options.

"With that in mind, I'll continue to talk to the relevant stakeholders to ensure we can secure a really bright future for Rugby on and off the field."

The ARU imposed a controversial $200 levy on every junior team and senior club in the country this year. NSW and Victoria rejected the levy but will forego $400,000 in ARU development funding as a trade-off.

The governing body finished with a $10 million surplus last year despite bringing in $140 million in revenue.

That revenue is projected to drop to $100 million this year and $80 million next year due to the World Cup.

Wallabies players have already agreed to have their match fees slashed from $14,000 per Test to $10,000.