This official document details changes to the pre-lottery draft positioning system, which also governs waiver priority. The first draft that will be affected is the y102 draft, i.e. the draft preceding y102. [This will be copy-pasted onto the simbase.org front page shortly.]
STEADY STATE: Each team will have a draft number, which will be a positive real number. Each offseason, the following changes happen to the draft number:
(1) The numbers 4-9 are added to the draft numbers of playoff seeds 6-1 respectively.
(2) All draft numbers are multiplied by 0.8
The resulting numbers are used to generate the pre-lottery draft positions (lower numbers having higher picks) and also waiver priority. The lottery, which involves 70 random transpositions of the set of 18 positions (four independent times for the four rounds), remains unchanged. Note that of course step (2) doesn't change the priority list.
Draft numbers will be recorded to five decimal places. In the unlikely event of a tie, the order will be determined randomly.
TRANSITION PLAN: As mentioned, the first draft positioning affected is y102.
Y98-100: No changes to the current system -- teams that have made the playoffs least recently draft first, with ties broken by seed in that year. This is equivalent to having "draft numbers" of 0 through 17. I have added those numbers to the lottery replayer page for reference (an existing feature request).
Y101: Current system for draft priority, but instead of 0 through 17, draft numbers of those teams will be set with the highest priority team having a number of 5 5/6, increasing by increments of 1/3, with the lowest priority team having a number of 11 1/2. In addition, each priority will have a small pseudorandom number (on the order of 0.01) added to it (to prevent ties in the future).
Y102+: Implementation of the algorithm as above. So, for Y102, the Y101 draft numbers will have 4 through 9 added to the appropriate seeds, and then be multiplied by 0.8 to produce the Y102 draft numbers.
The initial Y101 numbers are done to preserve an intermediate state of fluidity. If we set all the Y101 numbers to infinitesimals, Y102 would look just like it did under the old algorithm. If instead the initial seeds were extremely different from each other, Y102 would have the same order as Y101. The steady-state algorithm's inertia is designed to be more than the old algorithm but certainly not infinity; the y101 spacing produces a similar inertial compromise overall. The raw levels are set to yield a sum of 156 for the draft numbers, which will be identical going forward.