Just to follow up on this, I went through this process last night and it worked like a charm. Only "gotcha" was if your world has multiple Rookie level leagues or whatever, this won't work. As Sprague noted, you need to go 1 level up...so if you are trying to delete a R level league, you'll need to make the increase at the SA or Single-A level.
Now, that said, the "manual" part of moving people from 1 team to another is 10000% easier now with multi-select...there's a nice little radial button in the upper left corner on the Rosters/Transactions screen that selects everyone on that team. then just drag and drop. done.
