The arena issue is a real one that would have to be addressed (though googling around, there are some decent-sized hockey venues out there), but Weedy, there seem to be enough players to support many leagues at all kinds of levels, even now at basically the modern nadir of the sport. And the continent is getting smaller and better-covered for travel all the time. The travel issue is only going to fade as the years go on (and this kind of change would take years to sell and put into effect, if it happens at all, so I'd bet that won't be an issue by the time this sees the light of day). Promotion and relegation would fluctuate with the individual markets, but it certainly wouldn't hurt overall national TV revenue. In fact, you'd find some natural rivalries where none exist at the moment, and nothing, but nothing, drives viewership among casual fans and out-of-market viewers (which is the market these proposals are aiming for) like having a true underdog team in the mix.
"As long as you have revenue sharing, that idea only hurts the good teams as they end up having a significantly harder schedule than crappy teams. It's almost the opposite of teams' incentive to excel during the regular season to play the 8th seed round one." This is a typical reaction from North American sports fans, and it is caused by a number of misconceptions that I'd like to address. Revenue sharing. This concept often gets confused with the concept of parity. The two are completely different things, though they do influence each other and thus get confused. The purpose of revenue sharing originally was to financially stabilize the league in question, by ensuring that clubs having a bad year would still get enough income coming in to be around the next year and have a chance to improve their situation; it was not originally intended to cause parity. Parity on the other hand is the idea that you have to punish successful teams and reward unsuccessful teams in various ways so as to "handicap" or even things out, and this is done in various ways (at least from my understanding of the NFL; NHL may do some of these things differently) such as through college draft picks and jiggering the schedule to give poorly performing teams easier schedules the following season, etc. I don't see how my proposal above conflicts with either revenue sharing or parity. In fact, it's just taking the concept of fiddling with the next season's schedule to give poorly performing teams an easier schedule, to its logical conclusion. In point of fact, the existing parity system, in the way it addresses schedules (at least in the NFL the last time I checked; I'm not as familiar with the NHL scheduling system), already "punishes" the good teams and rewards the bad teams. So this proposal I'm discussing isn't really that radical of a change from the already existing systems used in North American sports, once you get over the initial conceptual hurdles. As for the rest of the objections above, IMO it is looking at things a bit backwards. You seem to be thinking that the good teams get a harder schedule but still have to compete against the bad teams with their easy schedule for Stanley Cup playoff spots; that is not what I am proposing at all! Sure, the better teams get a harder schedule; but really that's a reward, not a punishment, because being in the upper division (or whatever it would be called) means you have a chance to compete for the Stanley Cup that year, and that means a lot of prestige and chance to earn money in the Stanley Cup playoffs. Being in the lower division means you are in competition that year not for the Stanley Cup, but rather for a chance to get back into the upper division and a chance to compete for the Stanley Cup the next year. There could also be a post-season playoffs and cup competition for the top lower division teams so they could get some post season revenue, too. What this means in practice is that the top half of the league are only playing against other top half teams, so sure their schedules are "harder" but by not having all those games against the bottom half of the league, fans get to see better matchups and fewer craptactular mismatches and blowouts. The same goes for the bottom half of the league: you get better, more even matchups, ie, you get "parity" by adjusting the "schedule set" every year by moving the top two or three or four teams up from the lower division, and moving the bottom two or three or four teams down from the upper division. Better matchups, more evenly matched teams, means a better product, as well, for the fans to watch. Yes, this means for the year in question all the lower division teams are "out" of the Stanley Cup playoffs, but they have that year to turn things around and get back into the upper division. That's their motivation, that's their fan's motivation, it works quite well as an incentive for players to play and fans to watch. It may take away the illusion that "any team can win it all" in any given season, but we all know that that is just an illusion. It takes more than one season to turn around a cellar dweller into a championship contender; this system acknowledges that fact and gives the lower teams an easy schedule for a year and a better chance to turn things around, and it gives the upper teams a chance to compete just amongst themselves and thus makes their games that year that much more meaningful than they would have been under the existing system.
Hypothetical situation: You drop down the Caps and and bring up the Bears. Nice, you just dropped a franchise and brought up it's minor league affiliate. Seriously, who could possibly think the Bears be a better option than the Caps? Or the Phantoms than the Flyers? Or the Icehogs over the Blackhawks? They're the feeder team so if the NHL team doesn't have the talent what makes anyone think the minor league team (typically run by the big-league team) would or could? Most, if not all, top-level minor league teams (oxymoron?) are affiliated with an NHL team so if the talent were ready or able to compete, said talent would already be in the NHL.
Not a bad idea but the money grubbing owners would never go for it.