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I think that both @ELA and @utee94 have interesting points. 

First, on ELA's point, I think that it creates a lot more havoc in BB because one player makes a MUCH bigger difference in BB than in football.  Consider LeBron James.  If he had graduated HS in this modern era where the NBA requires kids to play a year after HS somewhere else, that would have been an enormous bidding war.  LeBron James could probably have single-handedly taken any P5 program to AT LEAST the Sweet 16 and possibly more.  For an even decent team, LeBron would easily have been the difference between a first or second round NCAA exit and a likely Final Four. 

Second, I completely agree with @utee94 .  One of the major problems with this is that there is simply no way for the NCAA to police the difference between a "legitimate" payment for a likeness and an "illegitimate" recruiting bonus. 

Oh yeah, even bigger impact in basketball and potentially more treacherous bidding simply due to the smaller market size.  Excellent points.

Personally I'm focusing more on football than on basketball, because I just don't care all that much about basketball.

Schools with the largest fan bases would benefit the most.  Blue chips will make the most there.

The point for me is that if you decide to make it a market, and money becomes an impact, it might give lesser schools more chance at winning recruiting battles. Today the helmets / blue bloods have enormous recruiting advantages BECAUSE they're helmets / blue bloods. Making it about money is a battlefield that is easier to level than the reputational values created by 100 years of college sports history.

Well, the problem is that what we call "illegitimate" wouldn't be illegitimate. The dividing line would be university-provided benefits [which likely also involve Title IX] and third-party benefits. I think the NCAA would have to just throw its hands up regarding what we call illegitimate benefits because they can't be policed.

First point highlighted in red-- well, maybe?  But I'm not sure.  In many cases the bluebloods ARE the deep pockets and free market or not, they're still going to be able-- and more importantly willing-- to pay top dollar.  I guess we'll see how it works out because I'm rpetty sure now, that it's going to happen.

Second point highlighted in green-- yeah, for sure, that's why I specifically couched my language in some qualifiers.  It wouldn't actually be illegitimate and certainly wouldn't be in any way enforceable or realistically even measurable.  I simply called it that, because I don't believe that creating a bidding war in recruiting by paying players for their likeness even when their likeness has no real market value in the traditional sense of the phrase, is the primary goal of this legislation.  But it WILL be a resultant effect and possibly a much more influential one than the primary goal.

I get it, but that is my point.  I can't figure out a way to police it so it is an all-or-nothing thing.  I'm not really all that strongly opposed to what @utee94 and I are referring to as "legitimate" benefits but I am strongly opposed to what he and I are referring to as "illegitimate" benefits and I can't see any way to define the difference in an enforceable way so I am opposed to it generally. 

Finally, I disagree with your theory that it will benefit smaller schools.  In the end I think it would benefit the big helmets simply because they have the most fans/boosters.  I'm not sure how specifically it would work out but I assume that it would work to the benefit of the big helmets like my school.  That said, while I generally like things that are good for my school, I don't like this because I think it could just completely flatline the non-helmets and make it such that the Ohio State's, Alabama's, Texas', and USC's of CFB have virtually zero in-conference competition, much worse than it is now.  At the end of the day I want my team to win every game, but I do't want it to get to the point where the B1G's non-helmets permanently don't even have a prayer. 

Except for Michigan, I'm assuming?

Well here's one way it would work to Big Money U's advantage, over Scrappy State.  To go with bwar's example of 5* Johnny Armcannon once again, let's assume he's right and the real asking price for his services is going to be $250,000.  That's not so far-fetched, as we all know the LOSING bid for Cam Newton's services was $180,000 so Auburn paid something north of that to buy their player and the resulting national championship.

So Armcannon wants $250,000.  Now that's a lot even for Big Hat from Big Money U, and it's even more to expect from BagMan Manchester, since Scrappy State doesn't have the same resources.  But, knowing that the star QB for Big Money U is going to be able to sell his likeness to all 500,000 living alumni of the university, it's less of a gamble for Big Hat, than it would be for BagMan Manchester from Scrappy State, since they only have 200,000 living alumni and bring in maybe 25% of the licensing revenue that Big Money U does on an annual basis.

You see, Big Hat certainly has to front the money, but he's also making an investment with an expected financial ROI down the line, and not just buying a player to win football games. And the expected ROI for a starting QB at Big Money U is naturally going to be a lot more than it will be for the starting QB at Scrappy State.  So Big Hat has a lot more money to play with in setting up his portfolio of bought-and-paid-for recruits.

Maybe.  It's just a working theory anyway.

What happens when Bartholomew "The Bag Man" Manchester crosses Joe Texas Big-Hat Billionaire Booster and he starts to realize that Johnny Armcannon, the 5* QB,has changed allegiance what are the legal ramifications because the NCAA has anal cerebral inversion as usual

Oh, you mean like the time that Texas A&M boosters gave Eric Dickerson a brand new gold Trans Am, and Dickerson drove that thing right up to Dallas where he played for SMU to the tune of $1,000,000?  And that was back in 1983...

In reality, Armcannon doesn't get a dime of his money until he signs, or steps on campus, or whatever.  With everything above the table and legal, it's not hard simply to write all of that into the contract.

Finally, I disagree with your theory that it will benefit smaller schools.  

I'm not sure it's even a theory... More of a conjecture or a hypothesis. And I'm not sure I agree with my own conjecture ;-) 

I certainly think it might be possible though.

I see zero evidence the NCAA is "going in this direction", but carry on.

As noted, it would open ENORMOUS holes in leveling the recruiting field.

What does this mean? 

But I also see a class of what I'll call ILLEGITIMATE uses of the legislation, and it would be most effective in recruiting.  For example, what's to stop Joe Texas Big-Hat Billionaire Booster from telling all recruits, "I'm offering you a non-exclusive contract for your likeness set at $25,000 per year, that will be available to you on signing."  For a wealthy fanbase, it would be quite easy for one booster, or multiple boosters, to pay out that kind of money to every single signee.  Beyond that, if a player actually gains popularity and his likeness becomes worth MORE than that basis, then the contract could allow that player to earn for himself anything above the already-agreed upon value.

I'm specifically calling that an "illegitimate" use case, because it wouldn't be illegal or against the rules, but could be a realistic consequence.  And in that case, the very richest schools would have the largest competitive advantage, simply because they could afford to pay more.  In many cases the richest schools coincide with the blue bloods, but not in all cases.  Stanford comes to mind as a school with an extremely wealthy fanbase that could take advantage of this.  I'm not sure they're football-crazy enough to do it, but it would really only take one...

In effect this creates a completely legal and permissible recruiting bidding war.  And long term, I'm not sure how that works out for the sport.

This is for the most part how college football works now. Success tied to money, money tied to success.

If the answer is, this rule makes it less fair, this sport is hilariously already unfair. We literally have half the top division that is considered second division because of money/fanbase size/brand value.

Nowadays, since kids aren't paid, boosters by schools sleep pods and lavish locker rooms. Schools take a cut of the top, paying everyone, and we pay people in different ways.