As far as contraction goes, there are three markets which seem most likely. Charlotte, Toronto and Sacramento. Two of these teams should be eliminated and the players entered into a supplemental draft of some sort. And the other should be relocated to Seattle, a fine sports town which supported a pro franchise for years and would likely build a new arena if doing so would land another team. Divisional realignment is needed because of team movement such as that of the Grizzlies from Vancouver to Memphis. The Griz are located in the eastern time zone but play a majority of conference road games against teams located in the western time zone. I think a relignment should look something like this.
Boston, Philly, NY, NJ, Washington, Detroit, Cleveland,
Chicago, Indiana, Milwaukee, Miami, Orlando, Atlanta, Memphis Western Conference
Dallas, Houston, New Orleans, San Antonio, Oklahoma City, Denver, Minnesota