Alex Palou is being sued by McLaren Indy LLC for breach of contract, stemming from the confirmation in the middle of 2023 that he had signed an extended contract with his current team, Chip Ganassi Racing, for the 2024-2026 seasons in IndyCar.
Why was this a problem for McLaren? Palou had signed a contract with the team in 2022 that positioned Palou to drive for McLaren in IndyCar beginning in the 2024 season. Simultaneously, in 2023, Palou served as a reserve driver for the McLaren Formula 1 team.
Now, Palou is on the hook for damages and interest rates equating to $25 million from 10+ valuations including sponsor revenue, salaries of other drivers such as Pato O'Ward, who performed Palou's services post-CGR contract announcement, signing bonuses, and more.
In court this week, Palou began his testimony and further cross-examination by claiming that the reason he signed a contract with McLaren in the first place was the promise of a Formula 1 seat — a claim that McLaren representatives vehemently deny.
With this claim from Palou in mind, the answer as to 'why' Palou 'abandoned' his McLaren contract was Oscar Piastri's signing to the McLaren F1 Team.
"I was very upset, worried, and angry that McLaren had signed another rookie driver other than me. The only attraction was to go to F1. My ambition was because it is the biggest single-seater series in the world."Alex Palou
Palou further claimed, to the shock of the racing community, that Zak Brown, McLaren CEO, told him that signing Oscar Piastri wasn't even his decision, but that of McLaren's Team Manager, Andreas Seidl. Additionally, Palou's performance would be "evaluated against" Oscar's for the 2024 seat.
Remaining at Chip Ganassi Racing, Palou is now a 4-time IndyCar Champion and Indianapolis 500 winner, but Palou claims Formula 1 is "what I wanted at that moment".
Even so, there was also drama on the CGR side, with Palou later finding out that he breached his CGR contract in signing the McLaren contract in the first place. However, this matter was settled behind closed doors between the two, unlike the current suit with McLaren.
"I had to take a decision to get out of a contract with someone who had never lied to me [Ganassi] or someone who had done the opposite [McLaren]."Alex Palou
During Alex Palou's testimony, McLaren's Barrister, Paul Goulding KC, asked Palou flat out if he had "misled McLaren," promising to drive for their IndyCar team only to earn a Formula 1 Seat. A claim that Palou vehemently denied.
However, before Palou even took the stand, Zak Brown had his day in court, claiming in summary that there were never any promises made to Palou.
“I never strung along Alex. I never told him he would be under consideration for 2023… there was some optionality to join F1.”Zak Brown, McLaren Racing, CEO
Palou's team in their questioning of Brown took the team boss to task, asserting that this is not the first time Brown had promised drivers Formula 1 optionality and that he instead was stringing Palou along.
What really got the racing world buzzing, though, was Brown's testimony on Wednesday, October 8th, when presented with a number of WhatsApp messages. Some of these messages were later leaked on social media.
These messages included McLaren's team manager, Gavin Ward, who had stated in these texts that McLaren allegedly requires a disappearing message function turned on to "cover their ass on lawsuits." These messages are from November 16, 2024.
What this posits is that there is a possibility that texts regarding Palou and contracts no longer exist and have been deleted, which is backed up by earlier texts from Zak Brown on August 3rd, 2023, just days before Palou announced that he would remain at CGR, not McLaren.
"Keep everything in whatapp [WhatsApp] amd [and] then delete. I'll respond any changes here."Zak Brown, McLaren CEO via Text
Palou's legal team used these text messages to claim in questioning Zak Brown that he destroyed evidence related to Palou' and instructed his team to do the same. Zak Brown was asked similar questions by his own legal team to which he simply responded "no".
Zak Brown and McLaren Racing are currently at the peak of their success both on and off the track, reporting massive earnings after the McLaren F1 Title Win during the 2024 season. This is a title that they have won again in the 2025 Season.
The case is set to resume on Monday, October 20th with the $25 Million still at stake for Alex Palou.
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