01/23/26 06:53:00
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01/23 06:52 CST Alex Palou ordered to pay McLaren Racing $12M in breach of
contract suit
Alex Palou ordered to pay McLaren Racing $12M in breach of contract suit
By JENNA FRYER
AP Auto Racing Writer
DAYTONA BEACH, Fla. (AP) --- Four-time IndyCar champion Alex Palou on Friday
was ordered to pay McLaren Racing more than $12 million in the breach of
contract suit the team filed when the Spaniard backed out of two different
deals with the racing team.
The Friday ruling from London's High Court came after a five-week trial last
year. McLaren initially sought almost $30 million in damages, but that number
was reduced to $20.7 million as the racing juggernaut sought to reclaim money
allegedly lost in sponsorship, driver salaries and performance earnings.
"This is an entirely appropriate result for McLaren Racing. As the ruling
shows, we clearly demonstrated that we fulfilled every single contractual
obligation towards Alex and fully honored what had been agreed," said McLaren
Racing boss Zak Brown. "We thank the court for recognizing the very significant
commercial impact and disruption our business suffered as a result of Alex's
breach of contract with the team."
McLaren added it is still seeking interest and reimbursement of its legal
expenses.
Palou was not ordered to pay anything related to Formula 1 losses McLaren said
it suffered when Palou decided to remain with Chip Ganassi Racing rather than
move to McLaren's IndyCar team in 2024. All the damages awarded to McLaren were
tied to losses the IndyCar team suffered by Palou's change of mind.
"The court has dismissed in their entirety McLaren's Formula 1 claims against
me which once stood at almost $15 million," Palou said in a statement. "The
court's decision shows the claims against me were completely overblown. It's
disappointing that so much time and cost was spent fighting these claims, some
of which the Court found had no value, simply because I chose not to drive for
McLaren after I learned they wouldn't be able to give me an F1 drive.
"I'm disappointed that any damages have been awarded to McLaren. They have not
suffered any loss because of what they have gained from the driver who replaced
me. I am considering my options with my advisors and have no further comments
to make at this stage."
Palou has won three consecutive IndyCar titles and the Indianapolis 500 since
this saga began midway through the 2022 season. He has four IndyCar titles in
the last five seasons. Palou and Brown are both at Daytona International
Speedway for this weekend's Rolex 24 sports car endurance race: the Meyer Shank
Racing team Palou is driving for will start from the pole Saturday, while Brown
is competing in a support race earlier in the day.
The bulk of the damages awarded to McLaren were tied to loss of sponsorship.
Palou was ordered to pay $5.3 million to cover the losses in the team's
agreement with NTT Data, $2.5 million in "other IndyCar sponsorship revenue"
and $2 million in performance-based revenue.
IndyCar team owner Chip Ganassi said Palou has his backing.
"Alex has our full support, now and always. We know the character of our driver
and the strength of our team, and nothing changes that," Ganassi said. "While
we respect the legal process, our focus is exactly where it should be: on
racing, on winning, and on doing what this organization has always done best,
competing at the highest level.
"We're locked in on chasing another championship and defending our 2025
Indianapolis 500 victory. That's where our energy is, and that's where Alex's
focus is, on the track, doing what he does best: winning."
McLaren has won the last two constructor championships in F1 and Lando Norris
last season won the driver championship.
Palou first signed with McLaren in 2022 to drive for its IndyCar team in 2023,
but Ganassi pushed back and exercised an option on Palou for the 2023 season.
The matter was decided through mediation, with McLaren covering Palou's legal
costs. Palou could not join McLaren until 2024 but was permitted to be the
reserve and test driver for the F1 team in 2023.
When McLaren signed Oscar Piastri for its F1 team, and Palou's performance with
Ganassi in IndyCar was so dominant, the driver decided he did not want to move
to McLaren's IndyCar team and reneged on his contract.
Palou argued his contracts with McLaren were "based on lies," and he'd never
have a chance to race in F1. His counsel also accused Brown of destroying
evidence by deleting WhatsApp messages related to the case.
McLaren contended it lost revenue when Palou backed out ahead of the 2024
season and the team had to scramble to find another driver. McLaren wanted
Indianapolis 500 winner Marcus Ericsson, who had already committed to Andretti
Global, so it instead used four different drivers that season.
Because none were as accomplished as Palou, McLaren argued both NTT Data and
General Motors reduced their payouts to the team because McLaren did not field
a driver of the caliber it had promised.
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AP auto racing: https://apnews.com/hub/auto-racing
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