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There are options in the dynamic league evolution settings to turn off certain types of events, but I don't recall whether there is an option to block teams from folding. If there isn't an option, it should be added as a feature for future versions of OOTP. Teams folded in the early days of what became MLB, but I doubt this would have ever been allowed to happen after 1900. When teams such as the Boston Braves, Philadelphia Athletics, Seattle Pilots and others encountered financial issues or attendance problems, they were sold and/or moved. We certainly wouldn't see teams folded or contracted today. The Players' Association would never agree to that, and if a city lost its team through contraction and MLB refused to allow a new team or ownership, we might see another challenge to baseball's anti-trust exemption.
In the meantime, if there isn't an option to stop teams from folding in your dynamic evolution settings, you can always review team finances toward the end of each season and make changes in commissioner mode to prevent a possible collapse.
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