More than a year after driver and team announced their impending union via social media, there apparently could be no future for Arrow McLaren and Alex Palou.

The NTT IndyCar Series team informed its employees after practice Friday afternoon that Palou “has no intention of honoring his contract,” according to a letter obtained by the Associated Press.

“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,” McLaren Racing CEO Zak Brown wrote. “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. Coming out of his team dispute last fall, we were assured by Alex of his commitment to Arrow McLaren reflected in the contract he entered into with us.”

The AP reported that Brown said Palou was paid an advance on his 2024 salary, and the team had invested millions in his F1 testing program since last year.

It’s the latest stunning development in a saga that started with a series of tweets on July 12, 2022.

After Chip Ganassi Racing announced that it had picked up a contract option to retain Palou for the 2023 season, the Spaniard tweeted that he had informed CGR that he would not be returning after ’22. McLaren Racing followed with a (since deleted) tweet and release that Palou would be joining its team in 2023.

Team owner Chip Ganassi took Palou to court, and the driver agreed to return to the No. 10 Dallara-Honda this year after the two sides entered mediation.

Palou won the 2021 championship with Ganassi. He has four victories and an 84-point championship lead through 13 of 17 races this season (while Arrow McLaren remains winless with its three drivers).

Since before the March 5 season opener in St. Petersburg, Florida, team owner Chip Ganassi has maintained that Palou would be welcomed back to his team in 2024.

Two hours before Saturday’s IndyCar race at the Indianapolis Motor Speedway road course, Ganassi released a statement disputing Brown’s characterization of Palou’s relationship to McLaren.

“Anyone that knows me knows that I don’t make a habit of commenting about contract situations,” Ganassi said in a statement. “Subsequently, I have been quiet since day one of this story but now I feel I must respond. I grew up respecting the McLaren Team and their success. The new management does not get my same respect.

“Alex Palou has been a part of our team and under contract since the 2021 season. It is the interference of that contract from McLaren that began this process and ironically, they are now playing the victim. Simply stated, the position of McLaren INDYCAR regarding our driver is inaccurate and wrong; he remains under contract with CGR.”

Though Brown made multiple references to Palou being under “contractual obligation” to his team, the Indianapolis Star has reported that Palou’s contract (which was obtained through court filings in the public record) did not allow negotiating with other teams before Sept. 1, 2023.

Palou said last week he won’t reveal his 2024 racing plans until after the Sept. 11 season finale at WeatherTech Raceway Laguna Seca. He also has entertained the idea of leaving IndyCar for Formula One next year.

The Indy Star reported Friday night that Palou is being managed again by Roger Yasukawa, who brokered Palou’s original IndyCar deals with Ganassi and Dale Coyne Racing. Last year, Palou had been represented by Monaco Increased Management, which put together his McLaren deal.

Monaco Increased Management put out a statement confirming that its relationship with the driver had ended and told the AP that its communication with Palou ended Wednesday.

According to a statement on its website: “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. Life goes on, and we wish Alex all the best for his future achievements.”

During an IndyCar media availability Thursday, Palou said he had no offers from F1 teams for ‘24. He was asked if he had received an offer from Ganassi for next season.

“No comment,” Palou said with a smile after a long pause. “If I say yes, you’re going to write a story, and if I say no, you’re going to write another story, so no comment. I am sorry.”

So he could be back here next year?

“At Indianapolis? I will be back in Indianapolis,” Palou said.

Does that mean you won’t be racing in Europe next year?

“As of today, no,” he said. “It might change tomorrow. But as of today, no.”


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