Uncovered: The ‘long and expensive’ McLaren v Palou war has reached its conclusion

McLaren has been accused of waging “a long and expensive war” against Alex Palou, with McLaren countering by claiming he had made a “deliberate, public and total breach” of their agreement.

McLaren and Palou have been locked in a legal dispute relating to the multi-time IndyCar champion reneging on his McLaren contract, with closing arguments delivered this week.

McLaren v Alex Palou: What we know about the trial

⦁ Lawyers deliver closing arguments with McLaren accused of ‘war’
⦁ The end of the F1 road for Palou, but he may not mind
⦁ Ruling due mid-December

The McLaren/Palou saga began in 2022 when the team announced it had signed Palou, only for Chip Ganassi Racing to put out a press release insisting he was still under contract as it exercised its option on the driver.

As that played out behind closed doors, it was announced the Spaniard would continue with CGR as an IndyCar driver for the 2023 season while also filling a reserve driver role for McLaren in Formula 1. He was expected to then join McLaren’s IndyCar team in 2024, potentially making the switch to Formula 1 in the years to come.

Palou, though, reneged on the McLaren deal, sparking a court case with the papaya team claiming $19.5million in damages against the driver for breach of contract in a dispute that landed the two parties in the London High Court.

Palou did not deny the breach of his contract but the Spaniard insists he does not owe McLaren anything as he was “deceived”, as his solicitor Nick De Marco KC put it, by McLaren CEO Zak Brown.

“I now consider that Zak made me think that there was an opportunity to have the full-time F1 seat as a negotiating tactic to get me to sign for McLaren’s IndyCar team,” he said in his testimony.

Brown denied that, adamant: “I never strung along Alex. I never told him he would be under consideration for 2023…there was some optionality to join F1.”

The CEO claims Palou owes the team, after all, “even Lando Norris” paid for his junior career before joining the Woking team.

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Palou’s defence is ‘contrary to common sense and sound judgment’

But at the end of a court case in which Palou claimed he would “have to pay for” the lawsuit in the future and had also taken a pay-cut from Chip Ganassi Racing to continue with the IndyCar team, McLaren’s lawyer Paul Goulding KC closed by saying his stance that he had been hurt more than McLaren is “contrary to common sense and sound judgment”.

In his closing submissions, seen by The Athletic, he said: “The defendants deny that the claimants have suffered any losses, including any sponsorship or performance-based losses. That position is unreal.

“The claimant’s position in this case is a straightforward one that accords with common sense. In very broad summary, it is clear and obvious that Mr Palou’s presence in the Arrow McLaren team, over a period of three or four years, would have been highly attractive to sponsors. Likewise, it would also have boosted the team’s on-track performance by some significant measure.

“In such circumstances, the defendant’s stance that Mr Palou’s deliberate, public and total breach of the AP Agreements has caused the claimants no loss whatsoever is unsustainable and contrary to common sense and sound judgment. Indeed, it justifies the court in approaching every single one of the defendant’s arguments with a healthy dose of scepticism.”

“It is clear from Mr Palou’s evidence that he had no intention to honour his contract with McLaren at the point that it was signed, and had entered it only with a view to exploiting the cross-over F1 opportunities it presented to him, before going back to CGR.”

McLaren waged a ‘long and expensive war’

Palou’s lawyer, Nick De Marco KC, countered that as he labelled McLaren’s $19.5 million demand as “overblown” and “over-inflated”.

“The kind of moral outrage that my learned friends, certainly in the written submissions, express in terms of the breach here is as overinflated as the claim for damages is,” he said.

“In the weeks before the breach, Mr Brown had indicated to Mr Palou’s legal team he would need a release fee of $2m – $2.5m to let Mr Palou take up an F1 seat with another team; and McLaren had internally estimated its losses as being in the region of $1.5m – $2.5m in the immediate aftermath of the breach.”

He went on to accuse McLaren of “waging a long and expensive war against a young racing driver”, adding that Palou “realised too late that McLaren’s promises of nurturing his long-held dream of a seat in Formula 1 were simply a lure to get him to sign for its IndyCar team.”

A judgement is only expected mid-December.

Alex Palou’s F1 road is over, even before it truly began

Alex Palou will never be a Formula 1 driver, ever.

Although three years ago, in September 2022, the dream burned bright as he put in the laps in a 2021-spec MCL35M at the Circuit de Barcelona-Catalunya in a behind-closed-door test.

“It’s just so perfect,” he crowed over his debut drive.

A few weeks later he was in the McLaren MCL36 at the United States Grand Prix, laying down the laps in FP1 to cover one of the team’s junior driver sessions.

“This car is insane,” he joyously declared.

Two months later, Palou was confirmed as McLaren’s reserve driver for the F1 2023 season but mid-season Brown announced that the driver had “no intention” of honouring his contract with the team. The relationship was over, and a court case was on the horizon.

Palou put his legal dramas behind him, winning a hat-trick of IndyCar titles with Chip Ganassi from 2023 to 2025, but he still gets a mention every now and again in F1’s rumour mill.

Mentions that turn out to be nothing but pure speculation and rumour mongering.

The latest involved Red Bull, which Helmut Marko shut down to Kleine Zeitung: “That’s not true.”

It was a rumour which Palou’s management has also poured cold water on.

“I have not talked to, nor have been contacted by any F1 team about Alex,” Roger Yasukawa told PlanetF1.com.

Given Palou’s unceremonious exit from McLaren, whether he wins or loses the High Court case and finds himself out of pocket to the tune of $20m or not, the saga does not look good and is unlikely to inspire other teams to show an interest.

Then again, McLaren’s behaviour, according to Palou, may have turned him off Formula 1 as well.

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