If this were to stick it is going to become a problem. Are schools going to have to pay their athletes to hang a billboard or show up on a schedule with the team picture on it? What about the school website? Can ESPN cut a promo of Clemson vs Alabama without paying Tua and Lawrence? What about unreported taxes? Wait until your star RB is under investigation for tax evasion. I don't see this sticking, but CA is trying to turn the opportunity for athletes to receive a free education into a bidding war. For those who think athletes will flock to UCLA and USC - who is cutting them the check when they're not playing other NCAA teams? When they can't play in March Madness? They lose value without the NCAA unless the NCAA were to dissolve altogether.
I agree that the CA approach will create all kinds of problems within the current system. And I'm not going to defend the CA law (not going to attack it either). But I do believe in the old adage that "if a thing cannot go on forever, it will not." The college sports model never remotely contemplated the amounts of money at stake today, or the myriad ways it is earned. Right now we allow the NCAA to allocate those billions of dollars via a cartel. Generally our laws and economy are built on the idea that markets are the best way to allocate resources--although there are certainly exceptions. Professional sports leagues operate in a kind of half-and-half world: MLB's practices would violate antitrust laws (if those laws were applied to it), but there are some market forces that constrain it, such as the requirement that it negotiate with the players union to divide revenues.
Right now, college athletes have almost zero ability to capture any part of the immense revenue stream that would not exist without them. I admit, it's hard to imagine a world where a star QB recruit plays Clemson off of Alabama to see which school will let him wear his school uniform royalty-free when he appears in a Nike commercial. And said recruit might need a detailed contract with his college spelling out when and where his likeness could be used without paying him, such as requiring him to show up for the team photo and appear in the annual media guide. But given the dollars involved, something like that may have to happen. The days when college sports were just about school spirit and keeping alumni happy are long past. Seems to me it is time for a new model (of some kind--not sure what that is). The NCAA can't just pretend it is still 1960.