How bizarre Palou McLaren contract saga fell apart

The long-standing contract saga between McLaren's IndyCar programme and Spaniard Alex Palou took an unexpected twist ahead of the Gallagher Grand Prix at Indianapolis.

Current Series leader Palou was due to join Arrow McLaren from Chip Ganassi Racing for next season.

But as a letter to team employees from CEO Zak Brown suggested, Palou has now U-turned on that option - likely to now remain with CGR into the new term.

This is not the first hurdle encountered during the saga - here's how we got to this situation.

July 12 2022 - CGR and McLaren conflict

Palou, who at the time was the reigning IndyCar champion for CGR, was announced as remaining with the team by virtue of a press release and the accompanying tweet, which read: "Chip Ganassi Racing announced today that the team has exercised its option to extend Alex Palou through the 2023 season."

But - much like the Oscar Piastri saga involving Alpine and, ironically, McLaren in F1 - Palou tweeted with a stunning response.

"I have recently learned from the media that this afternoon, without my approval, Chip Ganassi Racing issued a press release announcing that I would be driving with CGR in 2023," read Palou's tweet.

"Even more surprising was that CGR’s release included a 'quote' which did not come from me.

"I did not approve that press release, and I did not author or approve that quote. As I have recently informed CGR, for personal reasons, I do not intend to continue with the team after 2022.

"This evening’s unfortunate events aside, I have great respect for the CGR team, and look forward to finishing this season strongly together."

A release from McLaren subsequently confirmed the Spaniard's capture for the new term, which would have seen him partner Alexander Rossi and Patricio O'Ward in IndyCar, as well as taking part in F1 TPCs [Testing of Previous Cars] for the Woking-based outfit.

“I’m extremely excited to join the driver roster for such an iconic team as McLaren," said Palou.

"I’m excited to be able to show what I can do behind the wheel of a Formula 1 car and looking at what doors that may open.

"I want to thank everyone at Chip Ganassi Racing for everything they have done for me.”

July 27 2022 - CGR files lawsuit

Unhappy that it was losing a superstar driver, CGR took legal action against over the prospective swap.

“Alex Palou is under contract with Chip Ganassi Racing through the end of the 2023 season," read a lawsuit summons.

"He is a valued member of our team, and we will continue to support him in chasing wins, podiums, and INDYCAR championships.

“As the result of a competing racing team improperly attempting to contract with him notwithstanding the clear terms of our contract, we are proceeding to legal process pursuant to the contract.

“Any and all inquiries on the matter will be handled by our legal counsel.”

The dispute was eventually resolved with a settlement that would see Palou remain with CGR for this year before switching to Arrow McLaren next season.

The deal also included further F1 testing opportunities, as well as participation in one of the sport's mandated FP1 rookie runs.

August 11 2023 - Brown letter reveals Palou U-turn

After practice for the Gallagher Grand Prix on the Indianapolis Motor Speedway's road course, CEO Brown wrote to employees that Palou had reneged on his plans to join next year, suggesting the Spaniard had 'no intention' of fulfilling the deal in place.

"This is incredibly disappointing considering the commitment he has made to us both directly and publicly and our significant investment in him based on that commitment," wrote Brown.

"We dedicated a lot of time, money and resources preparing to welcome Alex into our team because we believed in him and were looking forward to IndyCar wins with him.

"We were assured by Alex of his commitment to Arrow McLaren reflected in the contract he entered into with us."

The management company that struck the McLaren deal for Palou, Monaco Increase Management, then released a statement of its own denouncing his actions.

"Monaco Increase Management is bitterly disappointed to learn about Alex Palou’s decision to break an existing agreement with McLaren for 2024 and beyond," it said.

"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.

"Life goes on and we wish Alex all the best for his future achievements."