Four-time IndyCar champion Alex Palou and Chip Ganassi Racing have ended a lingering contract battle with McLaren Racing with a settlement, all parties announced on Friday morning.
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London's High Court ruled in favor of McLaren in January and ordered Palou to pay more than $12 million. This followed a trial lasting more than one month in which McLaren aimed to show that Palou had backed out of two deals to drive for the team.
"I'm very pleased that we have reached a final settlement with Chip Ganassi Racing after a UK judge ruled in our favour in January," McLaren Racing CEO Zak Brown said in a statement.
"I want to thank the team working directly on the case for so many months, and everyone who supported us throughout the process. Pleased we can now return to battling things out on track and focus on what's set to be an exciting IndyCar season."
McLaren Racing had originally sought more than $30 million in damages. The team said that it would still pursue legal fees from Palou after the prolonged legal battle. However, the settlement brings the matter to a close.
Now, Palou and Chip Ganassi Racing can move forward with the NTT IndyCar Series season, which opens this weekend at the Streets of St. Petersburg. They will kick off their title defense.
McLaren Racing can similarly prepare for the 2026 Formula 1 season, which will feature team driver Lando Norris defending his championship.
"I'm happy to confirm that we have reached a final settlement with McLaren Racing following a UK judge ruling in January," Chip Ganassi said in a statement.
"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."
These events started when Palou signed a contract to move to McLaren for the 2023 season. However, CGR said that it held the contract rights for the championship-winning driver after exercising an option on his deal.
This situation led to some frustrated comments on social media by Palou where he said that he would not remain at CGR after the 2022 season. However, all parties involved ultimately reached an agreement. Palou remained with the IndyCar team in 2023 and simultaneously served as McLaren's reserve driver in F1.
The agreement also included Palou moving to McLaren's IndyCar team in 2024, 2025, and 2026. However, he then chose to remain at CGR, where he won three consecutive championships. Palou did not dispute that he breached his contract. He had previously argued that he would never get a chance in F1.
Palou said in a statement released after the settlement that he could have handled the contract situation differently back in 2023. He said that he regrets being in the middle of this difficult situation involving Brown and Ganassi.
"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."
