Tokyo - Japan's Sunwolves will be axed from Super Rugby after next season, the governing body said on Friday, dealing a heavy blow to Asian rugby just six months before Japan hosts the continent's first World Cup.
The Sunwolves were introduced in 2016 to bring rugby to new markets, but SANZAAR said it wasn't prepared to bankroll the perennial wooden-spoonists after Japan's rugby board withdrew financial support.
However, the Japan Rugby Football Union denied pulling funding for the team, but said it had been unable to agree terms with SANZAAR (South Africa, New Zealand, Australia and Argentina Rugby).
After the Sunwolves' departure, the southern hemisphere competition will return to 14 teams and a round-robin format from 2021, scrapping the unpopular conference system.
SANZAAR chief Andy Marinos said the Sunwolves decision was "not taken lightly", and held open the possibility of a Super Rugby Asia-Pacific competition also involving Pacific nations, the Americas and Hong Kong.
"SANZAAR was advised by the Japan Rugby Football Union in early March that they would no longer be in a position to financially underwrite the Sunwolves' future participation post-2020," he said in a statement.
Sunwolves CEO Yuji Watase admitted he had feared for the team since Super Rugby's ambitious expansion to 18 sides was reversed for the 2018 season.
"We always knew we needed to be competitive and win more games. Ever since Super Rugby went from 18 to 15 teams we were concerned about our future," he told reporters in Tokyo.
"When you see videos of a kid crying with joy because the Sunwolves won a game it's just such a shame and I feel so sorry," Watase added.
Reports say much of the opposition to Asia's first Super Rugby side came from South Africa, whose teams disliked the long trips to Tokyo and Singapore for the Sunwolves' home games.
Japan's Kyodo news agency said SANZAAR had told the Sunwolves to pay a "non-negotiable" participation fee of about 1 billion yen ($9 million) a year to stay in Super Rugby.
JRFU chairman Noriyuki Sakamoto was unable to give details of the stand-off with SANZAAR, but he disputed the assertion that his board had withdrawn funding.
"It was not that we were unwilling to underwrite the Sunwolves, we just couldn't agree the financial terms presented to us by SANZAAR with other demands on our budget," he said.
The Tokyo-based team were introduced with great fanfare along with Argentina's Jaguares in 2016 as Super Rugby, seeking new audiences, expanded to 18 teams.
Both teams survived the cull when the tournament shrank back to 15 sides in 2018, after the sprawling, time zone-hopping new format proved unwieldy for teams and fans.
But results on the pitch were slow in coming for the Sunwolves, who were embarrassed 92-17 by the Cheetahs in their first season and lost 94-7 to the Lions in 2017.
Now in their fourth season, they won away for the first time earlier this month, beating the Waikato Chiefs 30-15 for just their seventh victory in 51 games.
The Sunwolves have also faced criticism about the number of non-Japanese in their team, raising questions over their ability to develop home-grown players.
Rugby Australia chief Raelene Castle said it had come down to a decision about the "financial sustainability for our Super Rugby franchises".
"The reality is that as much as we see Japan as being an incredibly important part of the future of rugby, when the JFA withdrew their underwriting support for the Sunwolves... it left the SANZAAR partners in an exposed position financially," she said in Sydney.
Coach Tony Brown put a brave face on the announcement as his team prepared to play the Lions in Singapore on Saturday.
"I look forward to preparing to play every weekend and as a rugby team you can't look any further... the game is tough enough as it is. You can't look to two years' time," said Brown.