At the CFL's Board of Governors Meetings in February 1996, it was decided to end the league's four-year American experiment.
The Shreveport Pirates had already disbanded; the league folded the Memphis Mad Dogs and rejected a sale and relocation plan that would have allowed the Birmingham Barracudas to move to Shreveport and survive, forcing that team's closure as well. The Grey Cup champion Baltimore Stallions had opted to move elsewhere rather than face the daunting prospect of competing with the NFL's Baltimore Ravens. When it was apparent the CFL was refocusing on Canada, Stallions owner Jim Speros gave up the Stallions franchise and moved his organisation to Montreal as the third incarnation of the Montreal Alouettes. Up until this time, the city of Montreal had been without Canadian football for nine seasons. Speros revived the Als' traditional colour scheme of blue, white, and red. Their logo was an angry bird running with a football; it has been their helmet logo until 2019. Unwilling to continue as the lone American team in the league, the San Antonio Texans voluntarily folded.
A dispersal draft was held for the players on four of the five American teams—all except the Stallions. However, all of the Stallions players were released from their contracts. Alouettes general manager Jim Popp, who followed the Stallions organisation to Montreal, managed to re-sign many of them; he was limited to half of the Alouettes roster, since the Stallions as an American team were not subject to the league's requirement that half of a team's roster comprise Canadian citizens, and the Alouettes would be subject to that rule. To stock the roster with Canadians, a special expansion draft, in which only the Canadian citizens on each other team's roster were subject, was held to stock the Alouettes' roster.
With the removal of the American teams, the CFL reverted to its traditional "East-West" alignment. The revived Alouettes were placed in the East Division and the Winnipeg Blue Bombers were placed back into the West Division, after 10 seasons.