By 2004, the owners were claiming that player salaries had grown much faster than revenues, and that the league as a whole lost over US$300 million in 2002–03. Upon the expiry of the collective bargaining agreement (CBA), Gary Bettman announced that the players were again locked out to start the 2004–05 season. On February 16, 2005, he announced the cancellation of the entire season: "It is my sad duty to announce that because a solution has not yet been attained, it is no longer practical to conduct even an abbreviated season. Accordingly, I have no choice but to announce the formal cancellation of play." The NHL became the first North American league to cancel an entire season because of a labor stoppage.
As with the 1994–95 lockout, the owners were demanding a salary cap, which the players were unwilling to consider until the season was on the verge of being lost. The season's cancellation led union president Trevor Linden and senior director Ted Saskin to take charge of negotiations from executive director Bob Goodenow. By early July, the two sides had agreed to a new CBA. The deal featured a hard salary cap, linked to a fixed percentage of league revenues, a 24% rollback on salaries, and unrestricted free agency beginning after seven years of service.
The loss of the 2004–05 season led the NHL to institute a special lottery to determine the order of the 2005 draft, as there were no standings to base a drafting order from. The Pittsburgh Penguins won the lottery, and selected Sidney Crosby, a highly-prized prospect whose arrival to the NHL had been greatly anticipated. Crosby and the Washington Capitals' Alex Ovechkin, the 2004 first overall pick, were expected to become the faces of the NHL as the league entered a new era. Ovechkin was named the Calder Memorial Trophy winner as rookie of the year in 2005–06, while Crosby's presence helped Pittsburgh's attendance increase by 33%, over 4,000 fans per game.