Paying students to pick your program, when many other programs desire their talent is par for the course. I am of course talking about STEM GRADUATE STUDENTS.
Yes, getting the top graduate students into your program is so competitive that unless you are willing to offer the extra financial support they will go somewhere else. Of course, it makes no sense to do that in a multi-billion dollar industry when their coaches are being paid a million dollars... /s
PS: The California bill has nothing to do with universities paying students. It says that universities can't punish a student if they get compensated for their name and license. So an Olympic level swimmer could get compensated by Team USA and still swim for their school. A baseball pitcher could make money off of having a funny social media account. A football player could get a check from EA to make a college football game.
Yes, this might mean some boosters make up BS jobs to slip kids money, but this happens already at every level. If you don't see that you are being willfully blind.
At least now they have to fill out a tax form for it.