Alex Palou ordered to pay McLaren Racing $12M in breach of contract suit

By Canadian Press on January 23, 2026.

DAYTONA BEACH, Fla. (AP) — Four-time IndyCar champion Alex Palou on Friday was ordered to pay McLaren Racing more than $12 million in the breach of contract suit the team filed when the Spaniard backed out of two different deals with the racing team.

The Friday ruling from London’s High Court came after a five-week trial last year. McLaren initially sought almost $30 million in damages, but that number was reduced to $20.7 million as the racing juggernaut sought to reclaim money allegedly lost in sponsorship, driver salaries and performance earnings.

Palou was not ordered to pay anything related to Formula 1 losses McLaren said it suffered when Palou decided to remain with Chip Ganassi Racing rather than move to McLaren’s IndyCar team in 2024. All the damages awarded to McLaren were tied to losses the IndyCar team suffered by Palou’s change of mind.

“The court has dismissed in their entirety McLaren’s Formula 1 claims against me which once stood at almost $15 million,” Palou said in a statement. “The court’s decision shows the claims against me were completely overblown. It’s disappointing that so much time and cost was spent fighting these claims, some of which the Court found had no value, simply because I chose not to drive for McLaren after I learned they wouldn’t be able to give me an F1 drive.

“I’m disappointed that any damages have been awarded to McLaren. They have not suffered any loss because of what they have gained from the driver who replaced me. I am considering my options with my advisors and have no further comments to make at this stage.”

Palou has won three consecutive IndyCar titles and the Indianapolis 500 since this saga began midway through the 2022 season. He has four IndyCar titles in the last five seasons.

___

AP auto racing: https://apnews.com/hub/auto-racing

Jenna Fryer, The Associated Press