Both provisions conflict with California’s approach.

Will student-athletes be penalized? What about their universities?

They could be.

If neither California nor the N.C.A.A. changes course, student-athletes with agents or endorsement contracts will be in violation of the association’s rules. Normally, that would leave them ineligible to play.

In a letter to Gov. Gavin Newsom in September, the N.C.A.A.’s Board of Governors said California schools might gain “an unfair recruiting advantage” because of the law, and they would eventually be barred from N.C.A.A. competition.

Colleges and universities could face substantial fines — “potentially in the millions of dollars,” according to a legislative analysis — for N.C.A.A. violations, and the financial losses would be even steeper if universities lose eligibility for their teams to compete.

It is not clear, though, whether the N.C.A.A. could legally enforce any fines. California officials have said they do not believe the N.C.A.A. could punish colleges or athletes for complying with a state law.

In a statement on Monday, the N.C.A.A. said it would “consider next steps in California.”

Is California crazy?

California is betting that the N.C.A.A. will back down before the law takes effect in January 2023. Given the threats of litigation, fines and competition restrictions, t hat’s a risky proposition , but state officials contend that the N.C.A.A. and its members across the country simply cannot afford to ban or penalize California’s colleges and universities.

“This is one of the biggest media markets on planet Earth,” Newsom said in an interview with The New York Times. “Media cannot afford not to have California at scale being participatory in the tournaments. They know that, we know that, it’s a threat. I don’t necessarily take it to heart.”

How are people reacting?

Less than two hours after the governor’s decision became public, the N.C.A.A. said the law was already “creating confusion for current and future student-athletes, coaches, administrators and campuses, and not just in California.” The N.C.A.A., which could bring a lawsuit to challenge the California statute, said its members would continue to weigh changes to their rules.