McLaren F1 are looking for eight-figure compensation from Alex Palou, following a contractual dispute with the Spaniard.
Alex Palou has been a sensation in IndyCar this season, securing the Championship in dominant fashion. However, the last twelve months have also been filled with controversy for Palou. Most recently, he is now embroiled in a legal battle with McLaren F1.
Last season, the 26-year-old made headlines for reasons outside the track. Having already secured a title with Chip Ganassi, he made the decision to sign with Arrows McLaren for 2023.
This contract was disputed, however, with Ganassi claiming that a Palou was obligated to stay with the team an additional season. Ganassi even went as far as saying he lost respect for the current McLaren management.
New from @CGRTeams: A statement from @GanassiChip that disputes the @ZBrownCEO characterization of @ArrowMcLaren‘s contractual relationship with @AlexPalou. pic.twitter.com/ruoTp8CwET
— Nate Ryan (@nateryan) August 12, 2023
Opportunity in F1
Like many others, Palou was allured by the possibility of making a move to F1. Colton Herta was heavily linked to an AlphaTauri move in 2022, and – unlike Herta – Palou has enough super licence points to join the series. The Spaniard is also the more accomplished of the two drivers.
Therefore, it wasn’t a surprise to see McLaren moving to add Palou to their roster. At the time, though still in a contractual dispute with Alpine, the Woking squad was set to add Oscar Piastri to their driver pairing.
Still, the IndyCar Champion fancied his chances of competing for a contract in 2024.
Unfortunately for the 26-year-old, Piastri recently signed a three-year contract extension. This is hardly a surprise, given the Australian’s phenomenal performances as a rookie in F1.
As will be explained in more detail, this is the crux of Palou’s dispute with McLaren.
The British outfit is now seeking $23 million in compensation, according to the AP, following his decision to stay with Ganassi for next season.
McLaren’s claims
The Spanish driver claims that McLaren promised an F1 seat when he first signed the contract in 2022. With a Formula 1 seat now largely off the table, Palou was no longer interested in jumping ship.
Although other drivers haven’t been embroiled in such spectacular controversies, this dynamic is not entirely new. Pato O’Ward, for example, has revealed that potential opportunities in F1 incentivized his McLaren move.
For Palou, the failure to realize this opportunity removed any interest in joining the historic brand. Earlier this year, Palou reportedly agreed to a three-year extension with Chip Ganassi. It appears he is willing to enter the incoming legal dispute with McLaren.
From McLaren’s perspective, the majority of damages they are seeking are related to sponsorship. They claim that millions have been lost in sponsorship that was tied directly to Palou’s arrival in the team.
Additionally, the papaya outfit is suing for the costs of employing him as a reserve driver in F1 – alongside the salary he was to receive in 2024.
McLaren’s legal team claims that Palou was never guaranteed an F1 seat, meaning he was still obligated to fulfil his contractual requirements.
Ultimately, this seems to be a key aspect of this dispute – whether an F1 drive was explicitly guaranteed or not.
Up until the Singapore GP, Zak Brown’s outfit expected Alex Palou to fulfil his duties as reserve driver in Formula 1. The Spaniard did not attend the weekend, prompting the signing of a new reserve driver, Ryo Hirakawa, for 2024.
This dispute will no doubt develop in the upcoming months as the relationship between these parties reaches a bitter conclusion.
