McLaren vs Palou: $20m contract fight opens in London with F1 promise at the heart of it
McLaren has taken Alex Palou to the High Court in London, launching a $20 million claim that drags the sharpest edges of the driver market into full public view. At stake isn’t just money; it’s whether Palou was sold an F1 dream that never really existed.
The team says Palou walked away from a binding agreement to join its IndyCar programme, a deal announced back in October 2022 and set to span 2024, 2025 and 2026. Instead, the four-time IndyCar champion chose to remain with Chip Ganassi Racing — a move McLaren argues cost it a small fortune.
In opening submissions, McLaren laid out a damage sheet that reads like a balance sheet gone sideways: $1.3 million in extra driver costs, $15.5 million in lost sponsorship, and another $4 million in performance-related revenue it claims would’ve been on the table with Palou in orange. The total: roughly $20 million.
Palou’s camp doesn’t see it that way. His legal team argues there’s no compensation due — and that the Spaniard was misled about his Formula 1 prospects.
Nick De Marco KC, representing Palou, painted a picture of high-stakes brinkmanship, telling the court Zak Brown “enticed” Palou to leave Ganassi with talk of a road into F1, while, behind the scenes, McLaren was also stitching together its now-famous Oscar Piastri coup. As De Marco framed it, Palou believed an F1 promotion was realistic; then he watched Piastri announce his own McLaren future and realised that door was effectively shut. In his words, Palou felt he’d been “deceived” into thinking an F1 step was on the table when it likely never was.
McLaren’s counsel, Paul Goulding KC, didn’t just reject that claim — he turned up the volume on Palou’s market reputation. In court, he called the Spaniard a “serial contract breaker,” but also, tellingly, a “generational talent.” You don’t use those labels lightly, especially in the same sentence, but it underlines the awkward truth here: Palou is so good he’s worth fighting over, and the fallout from that fight has now landed in front of a judge.
It’s a messy saga with a familiar backdrop. McLaren’s pursuit of elite talent across series has been bold — sometimes abrasive — and, at times, brilliant. The Piastri saga with Alpine is still fresh in paddock memory. Driver negotiations in this sport are a contact sport; the question now is whether a promise of opportunity crossed the line into inducement.
As for the timeline, it’s straightforward enough. McLaren announced Palou as its next IndyCar driver in late 2022 with a multi-year plan. Zak Brown later told media that Palou had informed McLaren he had “no intention of honouring his contract with us in IndyCar or Formula 1,” which brings us neatly to this courtroom showdown. Palou, meanwhile, kept winning in America and stuck with Ganassi.
Beyond the courtroom rhetoric, there’s a bigger, quieter subplot: the shrinking window for IndyCar champions to make the F1 leap. Even if you’re winning everything Stateside, the F1 ladder is crowded, the seats scarce, and teams are risk-averse when their own academies are humming. Palou’s decision to stay put — when he clearly believed F1 was the prize — tells you plenty about how narrow that funnel has become.
This case isn’t going to decide who should’ve raced what and where, but it will decide who pays for a deal that never happened. If McLaren wins, it’s a powerful warning shot to any driver thinking they can turn on their heel after contract ink has dried — especially with sponsorship tied in. If Palou prevails, it may force teams to be far more explicit about the difference between “we’d like you in F1 one day” and “we’ll put you in F1.”
For now, both sides are dug in. McLaren says it lost millions and the services of the standout IndyCar driver of this era. Palou says he was nudged toward a promise that was never realistic. The court will hear more evidence in the coming weeks, with a decision expected in November.
Whatever the verdict, the real-world consequences will live beyond the courtroom. Driver managers will lawyer up earlier. Teams will sharpen their paper trails. And the next time a star from across the pond starts eyeing F1, everyone will remember London.
