Alex Palou, McLaren, Ganassi Settle Lawsuit after $12M Ruling

St. Petersburg, Fla. — Alex Palou and McLaren have settled their lawsuit, which was likely on the road to appeal after a $12 million breach-of-contract verdict against Palou in a British court earlier this year.

McLaren Racing originally asked for $31 million in damages after Palou backed out of a contract he signed in 2022 to drive for McLaren from 2024-2026. Palou, who signed a deal to remain at Chip Ganassi Racing in 2023, indicated in court documents that he opted to stay at Ganassi when a Formula 1 ride was not guaranteed. Palou had already admitted a breach of contract, and the six-week trial last fall in England only determined the damages.

Palou spoke at a general news conference Friday prior to practice for the season-opening St. Petersburg Grand Prix.

"I don't recommend that to anybody," Palou said about the litigation that covered 30 months and the lengthy trial. "It's not a very exciting experience for your life. But I learned a lot. I'm glad it's now over, that it's in the past.

"Honestly, I've gone through a lot in the last two-and-a-half or three seasons, and getting started now in 2026."

The settlement was announced Friday morning and means that there will be no appeals. 

Chip Ganassi Racing was obligated to Palou to pay any damages in the case, which frayed the relationship between Palou and McLaren CEO Zak Brown.

"I believe back then that I was provided with the wrong advice or no advice at all," Palou said in a statement. "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 I very much respect their organization."

Palou won the INDYCAR title in 2021, 2023, 2024 and 2025. His most recent title was the most dominant, as he won eight of the 17 races. 

Palou said Friday that the settlement will allow him to sign even more of a long-term contract with Ganassi.

"I cannot condone what happened, and I’m glad that the matter is over," Chip Ganassi said in a statement. "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."

Ganassi and Brown are considered bitter rivals.

"Zak and I had a good conversation," Ganassi said at the news conference. "So everything's good."

McLaren claimed it had to increase salaries of other drivers after Palou broke the contract and also lost close to $23 million in sponsorship from NTT on both the INDYCAR and Formula 1 sides, as well as $5.488 million in possible other sponsorship and more than $1 million in INDYCAR purse money.

"I’m very pleased that we have reached a final settlement with Chip Ganassi Racing after a UK judge ruled in our favor in January," 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."

Palou seemed relieved talking about the settlement Friday.

"It’s the first time that I can finally say that it's over and that I can finally focus on what's important, which is just to race and win races," Palou said.

"So I’m very happy about that. Very happy that everything that had to be said has been said, and that we can finally move forward and focus on this season."