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It’s War! McLaren seek $23-million compensation from Palou

mclaren brown palou

McLaren Racing is suing Chip Ganassi driver, 2023 IndyCar champion Alex Palou for at least $23 million to recoup costs the team says it lost when the Spanish driver reneged on the contract he signed with the legendary racing organisation.

Palou, 23, guaranteed that he had “no outstanding obligation under any contract or agreement” that would keep him from joining McLaren after the IndyCar season ended, according to the 29 September filing in the High Court of Justice Business and Property Courts of England and Wales Commercial Court. The Associated Press viewed the 17-page filing Tuesday.

The lawsuit is the latest twist in an ugly spat involving the talented young driver and two teams: McLaren, which in July 2022 said it had signed Palou and had him earmarked for an IndyCar seat and a reserve driver role with its Formula One team, and Chip Ganassi Racing, which said it had the contractual rights for Palou for the 2023 season.

Palou and Ganassi entered mediation and a resolution was reached a year ago in which Palou would drive for Ganassi in 2023 but could do F1 work for McLaren when it did not interfere with IndyCar. He was able to participate in a practice session last season for McLaren, tested for the F1 team both on track and in a simulator, and was the reserve driver for McLaren at F1’s Miami Grand Prix in May.

Palou was not available for comment however, he previously confirmed to The Associated Press last month that he’s not had any conversation with Brown or McLaren representatives since before the team was informed he was not honouring the McLaren contract. Palou also severed ties with the management group that brokered the deal with McLaren.

McLaren expected Alex to be F1 reserve for the team in Singapore

palou mclaren indycar f1

The nearly $23 million in damages McLaren is seeking is broken down in future sponsorship tied to Palou joining McLaren, the costs of using him as a reserve F1 driver, how much McLaren spent developing Palou for F1 and a $400,000 advance on his 2024 salary. McLaren is not seeking repayment of legal fees it says it covered for Palou in last year’s fight with Ganassi.

The filing states that after McLaren had already been informed Palou was not honouring his contract with the team, a second letter from attorneys representing Palou incorrectly claimed he had been promised a full-time seat in F1 and that because he was only going to be a reserve driver “a complete severing of the relationship (was) in order.”

McLaren held a hotel room in Singapore two weeks ago for Palou in anticipation of him being the team’s reserve driver that F1 weekend. Palou did not attend the race for McLaren.

Citing pending litigation, Palou has repeatedly declined to comment on the situation this year but attempted to explain his silence last month at a media event ahead of the IndyCar season finale.

He indicated he’d never expressed interest in F1 until after he’d won his 2021 IndyCar title and an opportunity to at least try to make it to the top racing series in the world presented itself. But with only a reserve driver role available, he said, he would prefer to stay in IndyCar. McLaren has both Lando Norris and Oscar Piastri signed through at least 2025.

Palou: I was not focused on F1 at all

mclaren 2J99XG0 Indianapolis, Indiana, USA. 21st May, 2022. ALEX PALOU (10) of Barcelona, Spain poses with their team and car after qualifying for the Indianapolis 500 at Indianapolis Motor Speedway in Indianapolis, Indiana, USA. (Credit Image: © Walter G. Arce Sr./ZUMA Press Wire)

“If you look at my interviews until 2021, I would say I was not focused on F1 at all, and that was totally true. But things changed when I won the championship,” Palou said last month. “I was 24. I had just won my first big championship and what if I tried something and it went sideways, then I could come back when I’m 27 and still super young and can still do it for 10 or 15 years.

“The door opened a little bit with McLaren. It was amazing. The opportunity was great, but there was nothing else there of, ‘You will have a car.’ Maybe if I was 20, I would have waited, but I’m not 20. I’m 26. I don’t know of anyone who waited until 30 that got into Formula One.”

McLaren contends Palou signed two contracts: the first with McLaren Racing as the F1 reserve driver and a separate deal with Arrow McLaren to compete in IndyCar for the team while also serving as the F1 backup.

Among the damages McLaren is seeking is nearly $15.5 million in lost revenue under official partner agreements with sponsors that anticipated Palou would be the driver. The team said it also lost some $3.5 million expected from third parties surrounding Palou’s participation in its testing program.

McLaren also wants to recoup all money spent on Palou when he was the test driver, both on track and in the simulator, and money it is spending seeking a replacement for Palou. (Report by Jenna Fryer)