The law could bring major changes to college sports in America. Many expect the National Collegiate Athletic Association, or NCAA, to challenge the law. The NCAA oversees college sports across the country. It generally does not permit students to accept money before or during their college athletic careers.
Under the new law, students at public and private universities in California will be able to sign deals with advertisers such as soft drink makers or shoe companies. Student-athletes also will be also able to earn money selling their own image or name -- just like professional athletes.
The law is set to go into effect in 2023.
California Governor Gavin Newsom said of the law , "It's going to change college sports for the better by having now the interest, finally, of the athletes on par with the interests of the institutions."
Newsom predicts other states would soon establish similar laws of their own. Two lawmakers in the state of South Carolina have already announced plans to do so.
The new law bars schools from removing college athletes from teams if they get paid. The law does not affect community college athletes, however. Also, athletes cannot make deals that conflict with their schools' existing contracts with companies and products.
The NCAA has 1,100 member schools and nearly 500,000 athletes. It said it is considering its "next steps." The organization noted, "changes are needed to continue to support student-athletes." But it also said that such changes must be done at a national level through the NCAA, and not through state laws.
Before the bill's signing, the NCAA had asked Newsom to veto the bill. The organization said the law would give California universities an unfair recruiting advantage, which could cause the NCAA to bar the schools from competition.
However, the schools could form their own separate athletic organization.
Newsom said any college student can make money using their abilities in writing, music or technology. He added, "Student-athletes, however, are prohibited from being compensated while their respective colleges and universities make millions, often at great risk to athletes' health, academics, and professional careers."
LeBron James is among the best-known professional basketball players in the NBA. He strongly supports California's new law. He said it will "change the lives for countless athletes who deserve it!" James' 14-year-old son is a closely watched basketball player in Los Angeles, California. He will be 18 when the law takes effect.
The NCAA has refused to pay players in most cases. But it does permit some exceptions.
Tennis players, for example, can accept up to $10,000 a year in prize money from professional competitions. Olympians can accept winnings they receive from earning medals. And major athletic conferences can give players cost-of-living stipends of between $2,000 and $4,000 a year.
The NCAA reported $1.1 billion in earnings in 2017.
I'm Ashley Thompson.