Starting in a higher division is always better, whether you lose all the games or not. The reason is because although you'll probably lose all the matches, there's higher TV contracts, merchandise and your arena will be filled for each home game (usually, given that the arena is quite small). So you have higher income than lower divisions, PLUS you'll probably get the first pick on the draft, as you'll probably come last. So there are more benefits when you're in higher division even if it means that you'll lose every game.