Alex Palou: ‘McLaren contract was based on lies – I’ll be paying for years’
Alex Palou has dominated IndyCar racing in recent seasons but claims that he’s not even among the series’ highest-earners as a result of McLaren’s $20.7m case against him
The McLaren vs Palou case saw its closing submissions this week
It was box office sporting litigation: F1’s best team claiming millions of pounds in damages from IndyCar’s best driver, airing dirty laundry and commercial secrets in a public courtroom.
Today the theatre came to an end, as both sides made their final submissions in McLaren‘s $20.7m (£15.43m) case against Alex Palou, who broke his 2024 contract with the IndyCar team to remain with Chip Ganassi Racing.
The case has been dramatic as it has compelling, with McLaren boss Zak Brown clashing with Alex Palou’s lawyer Nick De Marco in cross-examination, Palou saying his contract with the team was “based on lies” and serious accusations made of evidence being destroyed.
The judgement may not come for several weeks but, in the meantime, here’s what we’ve learnt from the titanic McLaren vs Alex Palou court case.
McLaren saw Ericsson as an ‘A’ class driver
Penske
When Palou backed out of his McLaren IndyCar contract at the end of 2023, the team had to find a replacement, and fast.
Its choice was Swedish driver Marcus Ericsson, and Brown claimed that he was one of the few ‘A’ class drivers on the grid, who had similar stature to Palou.
This was critical, the court heard, as sponsors including General Motors (GM) and NTT demanded top-level talent.
“In my view, Marcus is not quite as good a driver as Alex, and I did not think that GM would think he was of the same calibre,” said Brown in his witness statement.
“However, I believed he would be good enough to be an ‘A’ level driver for the purpose of the agreement with GM as he was a multiple race winner and had previously won the Indy 500.”
The McLaren boss stated he made a “multi-million dollar” offer to Ericsson at the 11th hour for 2024, but that the driver decided to remain with his existing team.
“Ericsson felt he was morally bound to Andretti – which was nice to hear from a racing driver!” exclaimed Brown under cross examination in court. He still argued that hiring Ericsson would have been a compromise compared to having Palou. “He wasn’t very good in F1,” was Brown’s assessment of the former Sauber man.
McLaren went down the pay driver route with Nolan Siegel
McLaren claims it has been forced into a catalogue of driver changes after Palou backed out of his contract.
It first signed David Malukas for the 2024 IndyCar season only for Chicago native to sustain a wrist injury in a mountain biking accident. He was then replaced by Callum Illot for selected races, before Theo Pourchaire was picked – who the team seemed set on for the rest of the year – before it made the shock switch to the inexperienced Nolan Siegel mid-season.
Due to the fact Pourchaire – an F2 champion – was suddenly removed for a driver who was certainly competitive on the IndyCar junior ladder, but had not yet performed on the Frenchman’s level, rumours began to spread that Siegel was paying well for his seat.
Evidence in court confirmed that McLaren has received payments from the young Californian to drive for it, so much so that Palou’s legal team argue that the IndyCar reneging his contract ended up benefitting the team rather than not.
A text message was shown in court in which McLaren’s then-Formula E boss Ian James contacted then-IndyCar principal Gavin Ward to enquire about Pourchaire’s abilities.
Ward replied in a text message to James that the McLaren IndyCar team made the switch because “Siegel deal too good to pass on.”
The court was shown an email revealing that when the Siegel deal was confirmed, Brown replied with a wine glass emoji.
When asked under cross-examination what he meant by this, Brown said “I’m expanding my wine cellar. It’s a good deal for my team.”
McLaren refutes the claims from Palou’s side that it signed Siegel for the money, claiming it would have hired Siegel whether the Spaniard was driving for it or not, saying he was a strong up-and-coming youngster, comparing him with Lando Norris and Pato O’Ward.
Norris paid his dues in every sense to be part of McLaren Academy
Grand Prix Photo
“Even Lando Norris” was a paid to be part of McLaren’s academy until his graduation to becoming a full-time F1 racer for McLaren, Brown said in court.
This was in response to cross-examination questions about why it took on a pay driver like Siegel, and was also questioned about the sums exchanged for Ryo Hirakawa’s Abu Dhabi FP1 drive (see more below).
Brown pointed to the fact that even Norris, now one of F1’s leading lights, was charged for the privilege of being involved with McLaren until his debut in 2019, and said that is the norm in top-level motor sport.
Hirakawa and Toyota handed over $3.5m to take part in an FP1 session for McLaren
McLaren
As highlighted above, a number of big names have been associated with sizeable fees throughout the case, but another interesting prospect was of how much it can cost a driver to take part in an F1 free practice session.
Palou’s contract with McLaren included the promise of taking part in F1 FP1 sessions, but when he decided to remain with Chip Ganassi Racing, a slot at the 2024 Abu Dhabi Grand Prix that had been allocated to Palou opened up.
It emerged in court that McLaren had sold that seat on to sports car star Rio Hirakawa, whose employer Toyota paid $3.5m (£2.6m) to take part in the session, which included two ‘Testing of Previous Cars’ (TPC) events in older machinery to prepare.
Disappearing messages was a hot topic in the court room
Grand Prix Photo
Brown was questioned on the use of Disappearing Messages (which delete themselves after a set period) in McLaren staff’s WhatsApp communications, which he claimed was the norm at this corporate level, as well as saying that other F1 teams do it too.
It was brought forward in evidence that Brown’s Disappearing Messages function had been switched on after he was instructed by his lawyers to preserve evidence related to the Palou case.
Brown claimed under cross-examination that he must have switched it on and off “inadvertently”.
“After the lawyers told you not to put on delete messages, you continued to do so and told your staff to do so,” said De Marco.
Brown denied destroying evidence relating to the case.
Separately, WhatsApp messages sent just before Palou announced he would be reneging on the McLaren contract, and pre-dating the legal action, showed Brown instructing his staff to “delete messages” in relation to some discussions on the Palou situation.
“You said that because you were keen to destroy evidence related to Palou, because you knew he would breach the contract,” claimed De Marco.
Other screenshots of a conversation between McLaren’s former team boss Gavin Ward and Canadian journalist Jeff Pappone were also shown, relating to the former’s exit from the team in November 2024.
“Oh man, turning off McLaren’s 7-day disappearing messages feels truly liberating,” he wrote.
When Pappone asks why, he said it was to “Cover their ass on lawsuits. Talk about a red flag.”
Siegel camp gave extra financial promise during the Month of May
IndyCar
Through court evidence, it also emerged – in the form of a message sent to McLaren leadership – that Nolan Siegel’s management was interested in getting its driver into a papaya car from around the time of Malukas’s injury first happening. Siegel’s manager inquired if there would be the possibility of finding a berth there, with the Californian funding the seat himself.
Later on at the Indy 500, his manager contacted McLaren’s IndyCar principal Gavin Ward when the Californian’s place in the big race was in jeopardy.
Siegel’s manager said he needed help from a more established team, and that they would “double-down” financially on the potential self-funded seat if it could give advice ahead of the ‘Last Chance’ qualifying session get the young driver into the 500.
Help eventually came in the form of advice from the team’s then-sporting director Tony Kanaan, but Siegel still didn’t make the cut.
Graham Rahal, who beat the youngster to make it into the 500 said “You’re going to be hearing a lot more of this man’s name in the future,” following Siegel’s elimination.
Siegel was signed by McLaren later that season.
Palou says his earnings aren’t quite up to that of other IndyCar stars…
IndyCar
As part of Chip Ganassi Racing’s offer for Palou to re-sign with it, the IndyCar team said it would pay for any legal action McLaren might draw up against him.
As a result of that though, the Spaniard has agreed to take a lower salary than many of his contemporaries – despite being the dominant IndyCar driver over the last few seasons.
“As we have seen the big numbers that have been claimed in this matter is something that I do not have as a person, as a driver,” he said in court. “There is no way I would have had the amount of money and expenses just to be here today.
“Although there is that indemnity, as a driver, I know I am not being paid the amount of other drivers. I am not in the top three of the highest paid drivers and I am not going to be for the foreseeable future… for this indemnity.
“I am going to have to pay for it with my base salary in the future and I am already doing it.”
Spaniard contacted Red Bull to see if a space in its junior team was available
Red Bull
Palou also claimed that interest from Red Bull young driver guru Helmut Marko cooled after he spoke to McLaren boss Brown.
“There had been some rumours in the media about AlphaTauri looking for a F1 driver and my name was in the mix,” said Palou. “In June 2023 I contacted and had a conversation over the phone with Helmut Marko.
“Helmut was open to me driving for them, and asked for the conditions of my McLaren release.”
Palou then said that, although they were asked not to, his representative informed Brown of Marko’s interest when discussing a buyout clause.
“Zak had directly called Helmut, and apparently Helmut had told Zak he was not interested anymore.
“I don’t know what happened in that conversation, but for sure it didn’t help because suddenly Helmut was not interested anymore…”
Palou says he was ready to be a reserve driver elsewhere from McLaren to make it into F1
Grand Prix Photo
It was revealed in court that Palou’s McLaren contract said he could be a reserve driver for another F1 team in 2027, so long as he didn’t race for another IndyCar team.
Palou’s revised contract with McLaren was due to run from 2024 to 2026 (shifted back one year after a mediation with Ganassi), with the potential to extend for another year.
De Marco asked the driver: “You could refuse that extension on the condition you did not race for another IndyCar team in the 2027 season.
“If you had stayed with McLaren, what would you have done when McLaren tried to exercise the option?”
The IndyCar star replied: “At that point I think I had the ability to not race in IndyCar but still try to get a Formula 1 reserve role with another team, so that is what I would have tried to do: that was my dream.”
Andrea Stella celebrates McLaren’s 2025 constructors’ title with the team – meanwhile, Zak Brown had a plane to catch
McLaren
Brown was in court on the Monday afternoon after the Singapore GP, less than 24 hours after McLaren clinched the 2025 constructors’ championship.
He even left his team’s celebrations early to make it in court on time, showing the importance of the case to him and McLaren.
Las Vegas – not a money-maker, yet…
Red Bull
Asked about how motor sport finances work in general, Brown was questioned on the success of F1, particularly new events like the Las Vegas GP.
However, the McLaren boss stated the race must be viewed for its indirect benefits, as it is not in itself making a profit: “They are losing a tonne of money – a tonne of money,” was his verdict.
Brown says Malukas has been impressive since McLaren let him go
IndyCar
Under cross-examination, Palou’s lawyer also put it to Brown that NTT were “unhappy” with David Malukas being suddenly dropped while injured in 2024.
Brown denied this, but did say that Malukas turned out to be “a damn good racing driver” upon his return to the series.
A text from Brown was also read out in court, from around the period McLaren was looking for a new driver following Palou’s U-turn, where he wrote “Tell him he has 24 hours, or we’ll sign Linus”. It was not specified which drivers he was talking about.
Fewer and fewer sponsors are interested IndyCar, according to McLaren
IndyCar
Brown and one of his McLaren commercial chiefs, Matt Dennington, said under cross-examination that the IndyCar sponsorship landscape is not what it once was, and claimed that teams are struggling to attract big title sponsors like NTT – hence their keenness to make concessions to it.
“Very far from being flush,” was his verdict to the court.
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