UPDATE: A decision by the Japanese Rugby Football Union (JRFU) to stop funding the Sunwolves after 2020 - and a lack of willingness among the SANZAAR nations to prop them up - will see the team exit Super Rugby after 2020.
SANZAAR confirmed on Friday that the Sunwolves would be axed from Super Rugby after the 2020 season, with a new 14-team format to be taken into the 2021 season.
The Sunwolves will play out the rest of the 2019 season and the 2020 year before the competition reverts to the round robin format in 2021.
The Japan Rugby Football Union withdrew its financial support for the Sunwolves beyond 2020 and with no alternative sources of funding, the bill would have been left to the SANZAAR nations to foot in the next broadcast iteration.
Castle said that was a call that would have cost in the "tens of millions", an amount that the southern hemisphere nations can ill afford to pump into Japan ahead of their own community needs.
"It has been a long process of work to look at competition models, to look at the financial sustainability of each of those models, to look at the integrity of those models, to look at what we think is going to be good for high performance outcomes but most importantly is to look at the financial sustainability for our Super franchises," she said.
"The reality is as much as we see Japan being an incredibly important part of the future of rugby, when the JRFU withdrew their underwrite support for the Sunwolves and they couldn't find another to guarantee that underwrite it left the SANZAAR partners in an exposed position financially and we didn't think that was in the best interests of the Super Rugby partnership."
While the timing is awkward for the side, still just a third of the way through the 2019 season, Castle said she was confident the Sunwolves' pride and their contractual obligations would ensure they continued to develop and be competitive in their remaining time in Super Rugby.
"It's always difficult when you make a decision like this you always end up with an overrun because of the nature of broadcast timing," she said.
"It's a reality, it's a fact and we have considered that but they are under contract to deliver a Sunwolves team for next year and we're confident they're very proud people that they want to make sure that Sunwolves team is competitive and they've got players that will be contracted into that time period as well."
Australia's Super Rugby franchises have been vocal about their desire to commercial opportunities presented by maintaining a Japanese presence in Super Rugby and Castle said those arrangements wouldn't disappear with the Sunwolves.
"The Australian Super Rugby clubs and New Zealand clubs have done a really good job of opening up commercial opportunities in Japan, and have actually delivered some really good commercial upside," she said.
"For many of those contracts, those contracts are based on the fact that those Japanese companies get a return on investment in terms of promoting to Australian customers so that’s where they are looking.
"It’s a genuine sponsorship opportunity, more than just because the Sunwolves play in Super Rugby."
Castle said the SANZAAR countries were committed to helping Japanese rugby continue to develop regardless of their Super Rugby involvement.
"That's certainly a significant driver but I think the announcement today that has been in the press release is also about recognising that whilst we don't see them taking part in the Super Rugby competition directly, SANZAAR is very keen to work closely with Japanese rugby to make sure we work with them to help them develop the second tier professional or their own professional competition," she said.
"That's where certainly New Zealand, Australia are going to be working very closely with the Japanese rugby union to bring our expertise, be that high performance experiences or competition development experience, to be part of that competition.
"I think the closeness of the two competitions and the relationships between the national bodies is very important as we look at perhaps the Cherry Blossoms coming into either the Rugby Championship or World Nations Cup competition to ensure that they're sustainable over that longer time."
EARLIER
SANZAAR has confirmed the Sunwolves will be cut from Super Rugby from 2021 as the tournament reverts to a 14-team round robin competition.
In a statement released on Friday afternoon, SANZAAR confirmed the news that had been widely speculated earlier in the week that 2020 would be the Japanese side's final year in Super Rugby.
A new broadcast deal beginning in 2021 will bring with it that new 14-team format, making this the second reduction in three years after the Western Force, Cheetahs and Kings were cut in 2017.
SANZAAR CEO Andy Marinos said the decision came after a "thorough review."
“The decision to further consolidate the competition format to a 14-team round robin was not taken lightly," he said in a statement.
"It has involved some detailed analysis and a thorough review of the current and future rugby landscape, tournament costs, commercial and broadcast considerations and player welfare in line with our strategic plan.”
“Competition integrity, affordability and a competitive playing environment were further key drivers to ensure that an optimal player development pathway remains in place to feed into international rugby.”
“Factoring in the above analysis and review a 14 or 15-team round robin format were considered, as these models delivered best against the criteria we were seeking, including a format that would see each team playing every other team leading into a finals series."
Marinos said that the pressure came on the Sunwolves with the JRFU unable to financially support the Super Rugby side beyond 2020 and that the national union had deemed Super Rugby was not the best pathway for the growth of Japanese rugby.
That call follows consistent tension between Japan's Top League sides and the Sunwolves over the availability of players and other related issues.
“SANZAAR was advised by the Japan Rugby Football Union (JRFU) in early March that they would no longer be in a position to financially underwrite the Sunwolves' future participation post 2020," he said.
"The future of the Sunwolves will now be determined by the JRFU which has determined that Super Rugby no longer remains the best pathway for the development of players for the national team.”
There has been reports this week that a new Asian Super Rugby type competition could be introduced to encourage the development of countries like Japan, the Pacific Islands and America.
“Japan and the Asia Pacific region remain strategically important to SANZAAR," he said.
"We will continue to work with the JRFU, Japan Super Rugby Association (JSRA) and other stakeholders, as we have done throughout this review process, to establish a truly professional league structure in Japan in which current and potentially new teams could participate.”
“We have presented options to them around the establishment of a Super Rugby Asia-Pacific competition structure including Japan, the Pacific Islands, North and South America and Hong Kong.
"The concept includes linking high performance programmes of such nations into the potential competition structure. The aim is to deliver a competitive and sustainable international pathway that can align to both current and future considerations around the international calendar.”
“We would like to thank the JRFU for their continued support and look forward to working with them going forward and we will continue to be supportive of the Sunwolves through the 2019 and 2020 super rugby seasons.
The much-maligned conference system will be no more from 2021 with each team to play 13 regular season matches with two byes incorporated, leaving teams with six or seven home games depending on the year.
Super Rugby's finals will also change into a top six finals series, with the top two sides having the first week off before facing off against the winners of sudden-death playoffs between the teams ranked third to sixth.
