McLaren $12m dispute with driver ends as party admits big mistakes

15:36, 27 Feb

Updated: 15:39, 27 Feb

bySamson Ero

Alex Palou has confirmed he has reached a settlement with McLaren following a long-running contractual dispute between both parties.

The IndyCar driver, who had been embroiled in a legal battle with the McLaren outfit, had been mandated to pay a settlement of over $12 million following a five-week trial, where a London High Court found that the Chip Ganassi driver had backed out of two different deals with the racing team.

However, ahead of the opening race of the 2026 IndyCar season, Palou confirmed that the dispute has now been resolved. In a detailed statement, the reigning IndyCar champion admitted he had mismanaged the situation, citing poor advice at the time, while also stressing that McLaren CEO Zak Brown was not at fault.

Alex Palou - Photo RacePictures

Palou issues statement after settlement with McLaren

The reigning Indy 500 champion acknowledged how difficult the legal process had been and expressed gratitude towards both Brown and his own team for their handling of the matter.

“Over the past few months, I’ve had time to reflect on what has been an incredibly challenging period, and I want to address it directly,” Palou began.

“First, I want to acknowledge both Zak Brown and Chip Ganassi. Both were put in a difficult position, and I regret being in the middle of that. Also, in January, a UK judge ruled in McLaren Racing’s favour regarding my IndyCar contractual breach. I respect that decision,” he added.

Alex Palou at the McLaren pitwall - Photo: RacePictures

The Barcelona native went on to explain that he believes the situation escalated due to poor guidance from those around him, admitting that events could have unfolded differently had he communicated directly with Brown.

“I also recognise that the way events unfolded in the summer of 2023 could have been handled differently."

“While little of this is publicly known, I found myself pulled in various directions and had the wrong people around me at the time, who I believe did not have my best interests at heart. I was given the wrong advice—or no advice at all. In hindsight, had I reached out to Zak directly, perhaps things may have played out differently."

McLaren CEO, Zak Brown - Photo: RacePictures

Palou was keen to emphasise that McLaren had honoured all contractual commitments throughout the process.

“McLaren and Zak supported me in many ways; they fulfilled every obligation, went above and beyond, and delivered on everything they said in their contracts. I was never misled by McLaren, and I very much respect their organisation.”

The 28-year-old concluded by thanking everyone at Chip Ganassi Racing for their continued support and expressed relief that the matter has finally come to an end.

“I also want to thank Chip, my teammates, and everyone at Chip Ganassi Racing for their dedication and support throughout this process. I’ve learned a great deal from this experience. I’m delighted this matter has now settled and I wish to thank all of those involved in reaching an amicable conclusion. My focus now is fully on moving ahead, where two great organisations that I respect deeply will compete solely on the racetrack.”

Background of Palou’s dispute with McLaren

The dispute dates back to the summer of 2022, when McLaren and Palou agreed on a move to the Arrow McLaren IndyCar team.

However, the four-time series champion’s team, Chip Ganassi Racing, only agreed to this move on the condition that the Spaniard would drive for the team in 2023 before any possible exit.

Palou later announced he would continue driving for CGR, citing concerns over the possibility of McLaren securing a Formula 1 seat for him. McLaren subsequently filed a lawsuit for breach of contract.