Montana Senate Bill 248 went into effect on June 1, 2023. This law allows student-athletes to earn compensation from Name, Image, and Likeness (NIL) endorsement deals and is part of a trend of NIL legislation being passed by states that allow student-athletes to monetize endorsement deals.
The Montana NIL law is broad. It codifies protections for student-athletes enrolled at colleges or universities in Montana (public or private) and allows these student-athletes to enter deals and earn compensation for the use of their likeness. This includes compensation for autographs, endorsing products, or appearing in commercials. The law also allows student-athletes to engage professional representatives, like agents.
The Montana NIL law does impose some restrictions on NIL deals. The law requires student-athletes to disclose their NIL deals to a college or university official – even if the deal was entered before enrollment. It also prohibits colleges and universities from compensating their prospective or current student-athletes for use of their likeness and prohibits athletic conferences from entering NIL deals with student-athletes.
Additionally, Montana's NIL law prohibits student-athletes from entering NIL deals that would violate any contract their college or university has with a third party, and deals that would violate the student-athlete's team rules. Teams cannot, however, establish rules that prohibit NIL compensation for the use of the student-athlete's likeness outside of official team activities. If a college or university believes an NIL deal conflicts with a contract or team rule, it must disclose the specifics of the violation to the student-athlete or their representative.
Interestingly, Montana's NIL law allows colleges and universities to serve as agents for student-athletes, and to manage contracts that use the athlete's likeness.
The law takes effect just as a number of federal bills that could impact NIL deals are currently being discussed in Congress. Federal proposals, including the College Sports Clearinghouse Act of 2023; the Fairness, Accountability, and Integrity in Representation of College Sports Act; and the Student-Athlete Level Playing Field Act, should be monitored as federal-level NIL debates continue.
Student-athletes, schools, and businesses looking to enter NIL deals should become familiar with Montana's NIL law – but should also keep an eye on congressional proposals. Proposals for federal NIL legislation would have broad implications if passed.
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