McLaren launches a $23 million lawsuit against IndyCar champion Alex Palou

Two separate lawsuits were filed against Alex Palou as Part 7 Claims seeking monetary compensation between $20 to $30 million.

McLaren launches a $23 million lawsuit against IndyCar champion Alex Palou

Alex Palou (Left) and Zak Brown (Right) (Credits: Imago)

The Indycar legal drama has become just as thrilling as the racecourse itself. McLaren and its Indycar arm, Arrow McLaren, have thrust themselves into the legal spotlight, seeking a staggering $23 million from IndyCar champion Alex Palou over a contract breach that has sent shockwaves through the racing community.

After McLaren Racing CEO Zak Brown dropped the bombshell that Palou would not honor his contract to race with Arrow McLaren in the 2024 IndyCar season, legal wheels started turning. McLaren Racing Limited and McLaren Indy, LLC filed lawsuits in the U.K. Commercial Court against Palou and ALPA Racing USA, LLC, the racing entity linked to Chip Ganassi Racing.

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Brown’s revelation in a letter to the team outlined the Spaniard’s separate contract with McLaren Racing for the 2024 IndyCar campaign. It read, “We made a significant investment in Alex Palou, looking forward to racing with him in 2024. We’re placing our trust in the legal system to resolve this matter and will keep our comments at that.” 

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Palou, initially committed to McLaren for the 2024 season, shifted to Chip Ganassi Racing.“I have no outstanding obligation under any contract or agreement,” Palou replied to AP News, which would anchor him with McLaren. He further revealed after his 2021 championship, notes a shift in focus to F1, emphasizing the necessity of certainty.

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Chip Ganassi hits back, asserting Alex Palou has been under contract with CGR since 2021

The extensive damages sought include compensation for lost future sponsorship revenue linked to Palou, costs incurred as a reserve Formula One driver, developmental expenses, and a $400,000 advance on his 2024 salary. Additionally, McLaren aims to recover nearly $15.5 million from partner agreements and around $3.5 million from third parties, covering testing programs and expenses for Palou’s replacement.

Chip Ganassi and Alex Palou
Chip Ganassi and Alex Palou (Credits: Autosport)

This legal tussle has echoes of the past, harking back to the prior year when Palou faced a similar predicament with Chip Ganassi Racing. Despite public assurances of commitment to McLaren, Palou reached a mediated agreement allowing him to race for CGR in IndyCar while moonlighting in a testing program with McLaren.

Chip Ganassi fired back, stating that he always revered McLaren, but respect for their new custodians had waned. “Alex Palou has been part of our team and under contract since the 2021 season. It is the interference of that contract from McLaren that began this process, and ironically, they are not playing the victim.” Ganassi asserted that “the position of McLaren IndyCar regarding our driver is inaccurate and wrong; he remains under contract with CGR.”

Palou reflected on his Formula 1 interest, noting his prior disinterest until winning the championship in 2021, after which his perspective shifted. Regarding the McLaren opportunity, Palou acknowledged the door opening with McLaren and expressed enthusiasm, but he highlighted the absence of a guaranteed race seat, a decisive factor given his age.

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