We might as well go to 40 and create two NHL divisions of 20 teams, with four teams moving up and down each year.
With 36 teams, the league loses ground, but the schedule also becomes very complicated. It's impossible to complete an 84-game schedule by playing every team twice.
Because even with 36 teams, there will still be markets to conquer.
After Houston, Atlanta, Kansas City, and Arizona, Portland, Indiana, Milwaukee, and Quebec will still be missing teams.
The NHL's mistake is to have placed two or even three teams in the same location.
Anaheim, Tampa Bay, New Jersey, and Long Island it's too much Four teams in the NY area and state out of 25 US teams is too many. In the NBA, only two out of 29 US teams. In the NFL, three out of 32 US teams. MLB, 2 of 30.
You move those franchises into the missing markets and that's it.
Anaheim is 40 minutes from LA, Tampa can host a few Florida games as part of a truly unique Florida team, New Jersey is located in a shady location anyway, Long Island is unstable without a large fan base and can host the historic NY Rangers.
New generations will adapt immediately; the two-bit internet fan who's a Ducks fan without ever having set foot in California will find another toy. Only a handful of passionate adults with an exaggerated attachment will sincerely cry. The majority, more pragmatic, will focus on their local team.