Alex Palou-McLaren Trial Could End 4-Year Saga for INDYCAR Champ

Alex Palou probably can’t say he’s looking forward to October, but he can say he’s looking forward to getting some of what he calls "bad decisions" behind him.

A trial in England is beginning this week over Palou backing out of a contract he signed in 2022 to drive for McLaren from 2024-2026. Palou has already admitted a breach of contract (he signed a renewal with Chip Ganassi Racing in August 2023 for 2024-26). The only issue at trial is how much he owes McLaren.

McLaren claims it is approximately $33 million in U.S. Dollars. Palou’s side states in court documents that the amount is "misconceived in a number of respects and vastly overinflated."

It is no wonder why teams would want Palou, who has won the INDYCAR title in 2021, 2023, 2024 and 2025. He won eight of the 17 races this year.

"I [made] some really bad decisions, and I was a little bit of an idiot, but ... everybody at CGR gave me another chance," he said during his championship speech earlier this month.

In answering a few questions about the lawsuit, Palou told FOX Sports that he is looking forward to putting this all behind him.

"It’s about time, right?" Palou said. "It's good that it's going to end this year. And I obviously don't know how everything is going to play out or how it's going to go.

"It’s my first time [in court], so you don't really know what to expect. But I'm happy that it'll be the first Christmas in a long time that it's been [without this drama]."

It was announced that Palou would leave Ganassi for McLaren and then he was sued by Ganassi to keep him from making the move. He said the contract situation in 2022 did impact him on the track. In court documents, it is indicated that he made the decision to stay at Ganassi when a move to Formula 1 wasn’t guaranteed by McLaren, something that McLaren said was a "baseless" assumption by Palou. 

"The first year in ’22 … that was really, really bad getting on track and more in my mind," Palou said.

"It’s been so long now that I think I've been able to just get it on the side and, as you say, and not worry. Well, worry but not be overthinking and just let my team figure it out."

When asked about the lawsuit in July at Toronto, McLaren CEO Zak Brown acknowledged the case was going to trial but would not elaborate on the case.

As with many driver-team lawsuits, some of the more interesting details are in the financials disclosed.

Among the McLaren info/claims:

— It would have paid Palou a base salary of $9 million over three years to compete in INDYCAR. His signing bonus was $400,000 (which he has paid back).

--In order to secure Pato O’Ward as a top driver (they must have an A-level driver for its Chevy deal) and F1 reserve driver instead of Palou, it had to increase his salary by $5.1 million from 2024-2027.

--Christian Lundgaard’s salary to race INDYCAR for Arrow McLaren is $6.3 million for 2025-2027.

--Nolan Siegel paid $1.25 million to drive for the team in select races in 2024; the amount he paid in 2025 is redacted in the filings.

--McLaren claims it lost close to $23 million as part of an NTT sponsorship deal on both of the INDYCAR and Formula 1 sides as the sponsorship was designed around Palou and had to be reworked without him. NTT has already told McLaren it won’t return after the 2026 season.

— McLaren claims it lost nearly $7 million in possible other sponsorship that it could have obtained with Palou.

— McLaren claims it lost a projected more than $1 million in what Palou would have earned them in INDYCAR race purse.

— McLaren spent $703,000 on Formula 1 tests that Palou did with the team.

— McLaren received $1.068 million from driver Ryo Kirakawa to test an F1 car.

Bob Pockrass covers NASCAR and INDYCAR for FOX Sports. He has spent decades covering motorsports, including over 30 Daytona 500s, with stints at ESPN, Sporting News, NASCAR Scene magazine and The (Daytona Beach) News-Journal. Follow him on Twitter @bobpockrass.