ST. PETERSBURG, Fla. — Alex Palou and Chip Ganassi Racing have settled the four-time IndyCar champion's breach of contract dispute with McLaren Racing, and the Spanish driver acknowledged Friday he mishandled the situation.
Palou in January was ordered by London's High Court to pay McLaren more than $12 million after a five-week trial in which McLaren proved he backed out of two different deals with the racing team.
The team was initially seeking closer to $30 million and said after the ruling it would still pursue legal fees from Palou.
“I’m happy to confirm that we have reached a final settlement with McLaren Racing following a UK judge ruling in January,” Ganassi said ahead of the first practice of the IndyCar season.
“I cannot condone what happened and I’m glad the matter is over. With the benefit of hindsight, I hope Alex has learned it’s important to keep good people around him, which he now does, so the events of 2023 are never repeated.”
A declaration filed during the trial showed Ganassi had agreed to bear "all reasonable legal fees and expenses associated” with the dispute with McLaren and to “defend and indemnify (the Defendants)” from any legal claims brought by McLaren, including “all legal fees and expenses, and damages of any kind.”
Palou announced in the summer of 2023 that he had signed a contract with McLaren, but Ganassi said it held the contractual rights on Palou for 2024. Mediation between the two teams led to the agreement Palou would drive for CGR in 2024 while he was also a reserve driver for McLaren's Formula 1 team.
Palou was expected to move to McLaren's IndyCar team in 2025 but did an about-face and decided to stay at Ganassi, where he has won three consecutive championships and four of the last five.
Palou acknowledged in a statement that he followed poor management advice at the time and said McLaren boss Zak Brown did nothing wrong. Palou had previously maintained he was misled into thinking he had a chance at one of McLaren's F1 seats and reversed his decision to leave Ganassi when McLaren signed Oscar Piastri to its team.
“I found myself pulled in various directions and had the wrong people around me back then who I believe did not have my best interests at heart,” Palou said. "I believe back then that I was provided with 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 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 very much respect their organization.”
McLaren has won the last two constructors' championships in F1 and Lando Norris added the drivers' title last season. But, in IndyCar, Ganassi has had the superior team and Palou did not want to leave for what he perceived as a lesser ride in that series once he felt he had no opening into F1.
Brown thanked his legal team for the work it has done since Palou's attorneys informed him in the middle of 2024 that Palou was staying with Ganassi. Palou refused to personally speak to Brown — on the advice of his management — and the unprofessionalism partly drove Brown to doggedly fight the breach of contract.
“Pleased we can now return to battling things out on track," Brown said, "and focus on what’s set to be an exciting IndyCar season.”
___
AP auto racing: https://apnews.com/hub/auto-racing
Copyright 2026 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
