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I don't stop by this forum too regularly, but my Baseball Saga dynasty (link in sig) is attempting to do just what you're asking about. The game is released with stuff you can use to just simulate through the pre-1900 era of baseball, but it's not accurate to real life. The amount of team movement, odd schedules, and various leagues makes it imposible for OOTP to replicate in its current form.
For that reason, I've been doing this manually. I've released National Association "as-played" schedules in the mods forum, which I entered in the game manually. I'm handling all expansion/contraction myself.
I can tell you that if you delete a team or a league from the game, the players get released as free agents to sign with any team. The team/league history all remains. That said, if you delete a league, the only place to find that league again is in your game's history pages. There's no problem with database corruption or losing that history completely, though, so that's good news for you.
One thing I'm currently in the process of doing is moving from the National Association to the National League in 1876. Instead of moving the teams to the NL, I'm actually deleting the previous teams and creating new NL teams. I don't want the team history from the NA being incorporated into the NL. For example, the Boston Red Stockings joined the NL, but if you look at historical baseball statistical records, the team's time in the NA aren't included. Before deleting the NA team, I went in and edited each player to be on the NL counterpart. That was easier than letting them get released as FA's and trying to figure out which players needed to go back on a team in the NL.
You can read more about the process and issues I ran into with the NA in my dynasty thread.
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StatsLab- PHP/MySQL based utilities for Online Leagues
Baseball Cards - Full list of known templates and documentation on card development.
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