For at least $23 million, IndyCar winner Alex Palou is being sued by McLaren Racing. The team claims it suffered a loss when the driver broke his commitment to the team.
The Sept. 29 filing in the High Court of Justice Business and Property Courts of England and Wales Commercial Court stated that Palou, a 26-year-old Spaniard, pledged that he had “no outstanding obligation under any contract or agreement” that would prevent him from joining McLaren after the IndyCar season ended. The 17-page document was seen on Tuesday by The Associated Press.
The lawsuit is the most recent development in a bitter dispute involving the talented young driver and two teams: Chip Ganassi Racing and McLaren, who each claimed to have Palou’s contractual rights for the 2023 season. In July 2022, McLaren claimed to have signed Palou and to have designated him for an IndyCar seat and a reserve driver position with its Formula One team.
Palou and Ganassi participated in mediation; a decision was made a year earlier stipulating that Palou would race for Ganassi in 2023 but could work for McLaren in Formula One as long as it did not conflict with IndyCar. He was allowed to participate in a practice session for McLaren last season, tested for the F1 team on the track and in a simulator, and served as McLaren’s backup driver at the Miami Grand Prix in May.
Zak Brown, the CEO of McLaren Racing, was contacted on August 8 and informed that Palou would not be joining McLaren. According to the document, lawyers informed Brown that Palou had extended his contract with Ganassi, where he won the 2021 and 2023 championships, for three more years, through 2026.
In response to a voicemail left Tuesday seeking comment, Palou did not answer. He previously told The Associated Press last month that he hasn’t spoken to anyone from Brown or McLaren since the team was alerted that he isn’t adhering to the McLaren contract. Palou also cut connections with the management team that mediated the contract with McLaren.
The roughly $23 million in damages McLaren is requesting is broken down into the expenses of future sponsorship linked to Palou joining McLaren, the price of utilizing him as a backup F1 driver, the amount McLaren invested in Palou’s F1 development, and a $400,000 advance on his 2024 salary. McLaren claims to have paid Palou’s legal bills in the dispute with Ganassi last year, but it is not asking for reimbursement.
According to the complaint, after Palou had already informed McLaren that he was breaking his contract with the team, a second letter from his attorneys falsely claimed he had been promised a full-time seat in Formula One and that since he would only be a reserve driver, “a complete severing of the relationship (was) in order.”
In anticipation of Palou serving as the team’s backup driver during that Formula One weekend, McLaren reserved a hotel room in Singapore for him two weeks ago. Palou didn’t show up for McLaren at the race.
Palou has neglected to address the subject on numerous occasions this year citing ongoing litigation, but he made an effort to justify his quiet last month during a media gathering prior to the IndyCar season finale.
He claimed that before winning the 2021 IndyCar championship and having the chance to at least try to make it to the top racing series in the world, he had never expressed interest in competing in Formula 1. However, he stated that he would like to remain in IndyCar if only a reserve driver position were available.
Lando Norris and Oscar Piastri are committed to McLaren till at least 2025.
“I would argue that I was not at all interested in F1 if you looked at my interviews up until 2021, and that is absolutely accurate. But after I won the title, everything changed,” Palou remarked last month. “I was 24. I had just won my first major championship, so what if I try something and it doesn’t work out? I could always try again when I’m 27 and still very young when I might be able to continue for another 10 or 15 years.
“McLaren pushed open the door a little bit. It was incredible. The chance was fantastic, but it only said, “You will have a car.” I might have waited if I were 20 years old, but I’m not. I’m 26. I am unaware of anyone who entered Formula One after waiting until they were 30.
McLaren asserts Palou signed two contracts: the first with McLaren Racing to drive as the team’s backup in Formula One, and the second with Arrow McLaren to drive for the team in IndyCar.
Nearly $15.5 million in lost revenue from official partner contracts with sponsors that assumed Palou would be the driver is one of the damages McLaren is requesting. The team claimed that as a result of Palou’s participation in its testing program, it also lost around $3.5 million in revenue from third parties.
The money McLaren spent on Palou while he was the test driver, both on the track and in the simulator, as well as the money it is investing to find a successor for Palou, must also be recovered.