You couldn’t make this up, because if you did you’d simply get laughed at. Just over 12 months after his contractual future between Chip Ganassi Racing and McLaren blew up, a second explosion has been detonated by the likely two-time IndyCar champion.
Following the last training session in Indianapolis on Friday evening, a message from Zak Brown, the CEO of McLaren Racing, was unintentionally shared with Jenna Fryer from The Associated Press. Jenna Fryer happened to be reporting on the Women’s World Cup soccer finals in Australia at the time.
The information was astonishing, as it exposed Palou’s lack of commitment to fulfilling his contract, despite having already been paid in advance for his 2024 salary.
“I am extremely let down by this, given the dedication he has shown to us both privately and publicly, as well as the substantial resources we have invested in him based on that dedication.”
Alex Palou, McLaren, on the pit wall
Photo by: Mark Sutton / Motorsport Images
Brown also emphasized the investment of time, money, and resources that were dedicated to welcoming Alex into our team. This was due to our belief in him and our anticipation of achieving victories in IndyCar alongside him.
This was underlined by Palou’s (now former) management company – with released its own statement: “Monaco Increase Management is bitterly disappointed to learn about Alex Palou’s decision to break an existing agreement with McLaren for 2024 and beyond. Together, we had built a relationship that we thought went beyond any contractual obligation and culminated in winning the 2021 Indycar crown and tracing a path to F1 opportunities.”
Apparently, it had been working with Palou right up until Wednesday of last week – even planning his championship celebration at Laguna Seca! – when he dropped the bombshell.
Alex Palou receives congratulations from Chip Ganassi.
Photo by: Jake Galstad / Motorsport Images
Chip Ganassi retaliated with a statement of his own…
“I typically refrain from discussing contract matters, as those who are familiar with me would know. Consequently, I have remained silent since the beginning of this situation. However, I now believe it is necessary for me to provide a response.”
“I have always held the McLaren team in high regard due to their accomplishments. However, I do not hold the same level of respect for the current management.”
Alex Palou has been a member of our team and bound by a contract since the start of the 2021 season. The involvement of McLaren in this situation, which they initiated, is quite ironic as they are now portraying themselves as the ones being wronged.
“Simply stated, the position of McLaren IndyCar regarding our driver is inaccurate and wrong; he remains under contract with CGR.”
Palou chose not to speak openly about the matter. He did not participate in any television interviews on Saturday, although he was observed with his former agent Roger Yasukawa. When Nathan Brown from The Indy Star approached him on the pre-race grid, Palou declined to comment on any inquiries regarding his future and whether he had already received payment from McLaren for 2024.
Alex Palou, Chip Ganassi Racing Honda
Photo by: Gavin Baker / Motorsport Images
What happens next?
Motorsport.com understands that Palou signed a McLaren contract in July 2022 that runs through 2026. Of course, following the legal action that Ganassi took last year, through a mediation process it retained his services for 2023.
However, Palou was given the opportunity to become a reserve driver for McLaren in Formula 1. This role involved participating in an FP1 session at the United States Grand Prix and taking part in three testing sessions with McLaren’s TPC program at Barcelona, the Red Bull Ring, and the Hungaroring. During the latter, Palou shared the running duties with race driver Oscar Piastri.
It is also known that the conditions of his agreement in the IndyCar division, which was postponed until 2024 due to the settlement reached in last year’s mediation, would oblige him to race for Arrow McLaren for the next three seasons. Additionally, there is a possibility that he could be transferred to their F1 racing team if an opportunity arises. This possibility is not unreasonable, considering Lando Norris’s remarkable achievements and the fact that Lewis Hamilton and Fernando Alonso are getting older and may retire in a few years.
The only guaranteed outcome of Palou’s notification to McLaren that he won’t join them next year is legal action on its part. Whether that’s to force him to join and honor the contract, or merely seek compensation for the U-turn, only time and a courtroom judgement will tell.
Alex Palou, McLaren MCL36
Photo by: Sam Bloxham / Motorsport Images
The awkward truth, however, seems to be that Palou has signed two different contracts for two different teams for the same series. Not only that, he’s done it twice now! The fact that the team that he’s apparently pledged his future to is the same one that took him to court last year is simply staggering in itself.
“I cannot reword”
Ganassi argues that McLaren is portraying themselves as the victim, as they were the ones who initiated this situation last year. However, Palou has managed to avoid any responsibility until this point. His behavior outside of the car is beneficial in this regard: he is extremely courteous, cooperative, and consistently responds to your inquiries, even if he occasionally avoids directly addressing their subject matter.
However, at present, his refusal to comment indicates that all attention is focused on him. He must take responsibility for his decision to reverse course. It is doubtful that he can attribute this to receiving poor advice, as he has personally witnessed the chaos it creates.
Patricio O’Ward, Arrow McLaren Chevrolet and Alex Palou, Chip Ganassi Racing Honda
Photo by: Geoffrey M. Miller / Motorsport Images
What has truly been altered?
There’s a couple of strands you can weave together to attempt to explain why Palou has opted for another summer of contractual pain and likely lawsuits.
Strand one: Chip Ganassi Racing is the best IndyCar team on the grid. Truth accepted. If he wants to win a third IndyCar title next year, there is no better place to be. And if he’s as determined to win the Indianapolis 500 as I think he is, then staying put with a crew he’s gelled with literally since weekend one in 2021, when he won first time out at Barber, makes sense.
However, Arrow McLaren has performed strongly in the Indy 500 in recent years. Although they have not emerged victorious in an IndyCar race this season, this can be attributed solely to the issue with Pato O’Ward’s Chevy engine at St Petersburg, just as he was about to secure a win.
IndyCar has two giants in Ganassi and Team Penske, but McLaren is hellbent on making it a trio and has invested heavily in doing so.
Carlos Sainz, Ferrari, with Alex Palou, McLaren
Photo by: Mark Sutton / Motorsport Images
Strand two: The elephant in the room here is Formula 1. We know Palou has ambitions in this direction, and his eyes light up when you discuss his McLaren runs so far. So why would he turn his back on an opportunity that gives him a direct route – albeit one without a guaranteed timeline – to an F1 race seat in waiting?
Was he not planning on doing more FP1 runs soon? What made him change his mind? Is Piastri’s recent performance making him nervous? Does he believe that Hamilton and Alonso will continue racing until they’re 50, so Norris will remain with his current team?
Moving to McLaren would involve changing from Honda to Chevrolet for power. Is this a trivial matter? Maybe not. It is rumored that Ganassi has offered Palou a significantly higher salary for the future, with some speculating an extraordinary amount that would make him the highest-paid driver in the series by a wide margin.
Although it is widely recognized that ‘Chip favors winners’, he is also renowned for being a discerning individual who does not readily spend his money.
Chip Ganassi Racing Honda logo
Photo by: Michael L. Levitt / Motorsport Images
Strand three: Bear with me while we play a little 3D chess, but perhaps Honda is behind all this? In 2026, it makes an overt return to F1 with Aston Martin Racing – despite its motors dominating right now – but it has an Alonso-shaped problem.
He has publicly expressed regret for his comments about the “GP2 engine” and has competed in the Indy 500 using Honda power. Koji Watanabe, president of Honda Racing Corporation, has also stated that they have no objections to Alonso driving for them again if they were to team up.
However, mere conversation is not enough. Rumor has it that Honda prevented Alonso from rejoining Andretti Autosport at Indy in 2020. Furthermore, considering Alonso’s age in 2026, which will be in his mid-40s, time is running out for him to pursue a third F1 championship with Aston.
Is Palou being considered by Honda, and possibly Lawrence Stroll, who is known for spending money to achieve desired outcomes, as the successor to Alonso? Is this the tempting offer that has convinced him to leave McLaren, even though he will face criticism for it? Could he also have the opportunity to win IndyCar titles and compete in the Indy 500 in the meantime?
Palou has undoubtedly proven himself as the standout driver in the IndyCar field. His dominant performance this year, reminiscent of his astonishing display in 2021, demonstrates his ability to excel at the highest level.
Unless there’s an unexpected turn of events, it seems like he won’t be continuing his work with McLaren.
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