Last Updated on November 28 2023, 4:09 pm

Formula One may have been robbed of ever seeing on of the most promising young drivers anywhere in global motorsport from ever competing in its series. Further, Alex Palou will now have to negotiate the $23m damages claims made by McLaren for his breach.

The newly crowned double IndyCar champion – Alex Palou – now admits in his statements to the Uk’s High Court that he did breach his contract signed with McLaren Racing when he did a U-turn and refused to leave Chip Ganassi Racing. 

 

 

Palou “lost trust” in Mcalren

McLaren are seeking to recoup $23m from the young driving ace in a lawsuit filed this September. Palou’s 20 page response was filed this week with the High Court and it reveals the driver simply “changed his mind” about joining McLaren ahead of the 2024 season.

Palou says he “lost trust and confidence that (McLaren) genuinely intended to support his ambition to race in the Formula One Series and decided to continue racing with CGR in the Indy Car Series instead.”

The Spanish born racer therefore “admits that he renounced his contractual obligations” with McLaren and “the real issue between the parties is as to the quantum of any damages which the Defendants are liable to pay,” the documents say.

Ganassi initially made a public claim they had picked up the rights for Palou to race for them in the USA during 2023, which McLaren initially challenged last year.

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However a court ruling stated Ganassi had the right for 2023 and Palou was deemed “off limits” to any other potential employers contacting him until the end of this summer.

Just prior to the end of the communication embargo, Palou announced he would be staying with Chip Ganassi Racing, something which clearly irritated McLaren’s CEO Zak Brown.

As part of the arbitration in 2022, Palou had been retained as a reserve driver for McLaren’s F1 team while he drove in IndyCar for Ganassi. He drove in a practice session and tested for the F1 team both on track and in the simulator and was the McLaren Fq2 reserve driver for the Miami Grand Prix.

He was able to participate in a practice session, 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.

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McLaren claim over lost sponsorship

McLaren Racing CEO Zak Brown was contacted Aug. 8 and told by attorneys for Palou that he would not be joining McLaren and had instead signed a three-year extension with Ganassi. Palou won the 2021 and 2023 championships with Ganassi and is now signed there through 2026.

IndyCar driver Pato O’Ward last week was named Palou’s replacement as McLaren’s F1 reserve driver and participated in a practice session during the season-ending race weekend in Abu Dhabi. O’Ward is a full-time IndyCar driver for Arrow McLaren Racing and also ran in the end of season test today.

Much of Palou’s statement to th ehigh court focuses on McLaren’s claimed loss of revenue and is an attempt to mitigate the amount Palou will be ordered to pay in damages.

The bulk of the $23m McLaren are claiming relates to future sponsorship now lost due to Palou’s decision not to join the team. There are also costs associated with the privilege of being McLaren’s reserve driver and the amount spent developing him for F1.

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Palou may struggle to pay even reduced damages

There is also the small issue of the $400,000 advance McLaren paid Palou towards his 2024 salary.

McLaren contend Palo signed two contracts with them with the first being as an F1 reserve driver and a separate deal to compete with the McLaren Arrows IndyCar team in 2024.

Damages claimed include almost $15.5 million in lost revenue under official partner agreements with sponsors NTT Data and General Motors that anticipated Palou would be the driver, including $7 million in revenue and prize money from IndyCar itself.

Palou’s statement concludes, “This claim is embarrassing for want of particularity and speculative in the extreme. The performance of any team in a future Indy Car Series cannot be predicted with any degree of certainty. Driver performance is variable.”

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F1 future over for Palou

Indycar drivers earn on average around $500,000 a year – far less than their F1 counterparts. Having won two of the last three championships stateside, Palo will undoubtedly have earned bonuses from his sponsors.

However the net worth of the Spanish race will in no way cover the kind of claim McLaren are seeking to bring and even a much reduced amount would cause Palou difficulty unless Chip Ganassi has promised to bail him out.

The McLaren, Ganassi, Palou dispute has probably robbed Fomrula One from one of the most exciting young drivers in any global motor racing series. 

Given his admitted breach of contract with McLaren it is highly unlikely another F1 team would take a chance on a driver with such a history.

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Irony for Mclaren following Alpine saga

Alpine suffered at the hands of a driver allegedly ‘going back on his word’ last season when their young academy protégé decided he was leaving ironically for McLaren F1.

However, Oscar Piastri was found by the FIA board of contract resolution to not have broken any deals with Alpine and their claims he had cost them millions in training were also dismissed out of hand.

Palou may call on the Piastri precedent which saw the Aussie leave Alpine as a free agent to join McLaren at no cost to his new employer. Further, Alpine’s claims relating to costs of Piastri as a reserve driver and one who had received simulator and free practice time were dismissed with no damages awarded to the French owned F1 team.

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