The National Hockey League was formed in 1917 in Montreal by teams formerly belonging to the National Hockey Association (NHA) that had a dispute with Eddie Livingstone, owner of the Toronto Blueshirts. The owners of the other four clubs ? the Montreal Canadiens, Montreal Wanderers, Quebec Bulldogs and Ottawa Senators ? wanted to get rid of Livingstone, but discovered that the NHA constitution did not allow them to simply vote him out of the league. Instead, they opted to create a new league, the NHL, and did not invite Livingstone to join them. They also remained voting members of the NHA, and thus had enough votes to suspend the other league's operations, effectively leaving Livingstone's squad in a one-team league.[5][6][7]
However, the other clubs felt it would be unthinkable not to have a team from Toronto (Canada's second largest city at the time) in the new league. They also needed another team to balance the schedule after the Bulldogs suspended operations (and as it turned out, would not ice a team until 1920). Accordingly, the NHL granted a "temporary" Toronto franchise to the Arena Company, owners of the Arena Gardens.[8] The Arena Company leased the Blueshirts' players and was given until the end of the season to resolve the dispute with Livingstone. The franchise did not have an official name, but was informally called "the Blueshirts" or "the Torontos" by the fans and press.[9] Under Manager Charlie Querrie and Head Coach Dick Carroll, the Toronto team won the Stanley Cup in the NHL's inaugural season.[7] Although the roster was composed almost entirely of former Blueshirts, the Maple Leafs do not claim the Blueshirts' history.
For the next season, rather than return the Blueshirts' players to Livingstone as originally promised, the Arena Company formed its own team, the Toronto Arena Hockey Club, which was readily granted membership in the NHL. Also that year, the Arena Company decided that only NHL teams would be allowed to play at the Arena Gardens?a move which effectively killed the NHA.[5] Livingstone sued to get his players back. Mounting legal bills from the dispute forced the Arenas to sell most of their stars, resulting in a horrendous five-win season in 1918?19. When it was obvious that the Arenas would not be able to finish the season, the NHL agreed to let the team halt operations on February 20, 1919 and proceed directly to the playoffs. The Arenas' .278 winning percentage that season is still the worst in franchise history. However, the 1919 Stanley Cup Finals ended without a winner due to the worldwide flu epidemic.