Palou’s shock McLaren move and its repercussions for rivals

IndyCar’s 2022-23 silly season was a relatively quiet one. Then Alex Palou, Chip Ganassi Racing and McLaren blew it wide open. David Malsher-Lopez examines what happened, and how it affects the driver market.

Alex Palou, Chip Ganassi Racing Honda

I have lamented many times about how, in motorsport, silly-season gossip about the future tends to distract from the here and now. In the case of, say, the top class in WEC over the past four years and the interminable internecine Toyota battle, it would be understandable if the focus was pulled away from on-track action and turned instead to ever-brightening prospects with new regs and new manufacturers.

But in the NTT IndyCar Series, it seems plain sad that we seem discontented with the status quo, which generally involves more than a dozen potential race winners on any given weekend and, at the halfway point of the season, six or seven drivers across three or four teams who have a legitimate shot at the title.

There was some hope of this not being the case this year, because most of the big-name drivers and big-name teams are hooked up at least to the end of 2023. Alexander Rossi had to make a decision regarding his future, he did so, and will move to Arrow McLaren SP, where he will join Pato O’Ward who resolved his early-season difficulties with the team. Aside from that, there were no major question-marks, so we could keep our attention on an enthralling battle that after nine rounds sees seven drivers covered by 70 points.

Or that was my hope, at least, so it was with some dolefulness I noticed that what actually happened was that attention turned to next year’s silly season, since several stars and potential stars will reach the end of their contracts simultaneously at the end of 2023.

And then the world turned upside down. A few hours after Chip Ganassi Racing confirmed it had taken up its option on Alex Palou’s services for 2023 – the press release replete with the usual “Happy to stay with such a great team”-style quote from the 25-year-old Spaniard – the driver himself hit his social media channels to call bullshit, say that the quote was fake and to announce he will be leaving Ganassi at season’s end.

Moments after that little ‘WTF?!’ came McLaren’s release that Palou had joined the team “family”, and that he will be sharing an F1 test program with fellow IndyCar drivers Pato O’Ward – already an Arrow McLaren SP driver – and Colton Herta, who just ran a two-day evaluation test at Portimao in last year’s McLaren.

Palou and Herta - are they now rivals for a McLaren Formula 1 ride in 2024?

Palou and Herta - are they now rivals for a McLaren Formula 1 ride in 2024?

Photo by: Phillip Abbott / Motorsport Images

While the news arrived in truly startling manner, the move itself was not totally out of the blue, for Palou had been linked with a move to Arrow McLaren SP for some months now. Many of us questioned why any driver would choose to leave the greatest IndyCar team of the last quarter-century to join a squad which is still trying to establish itself as absolutely top rank. There were three possible answers: McLaren was offering Palou a vastly increased salary, an opportunity in Formula 1, or both.

Bearing in mind McLaren had recently agreed to evaluate Herta in an F1 car – a move that temporarily knocked O’Ward’s nose out of joint – the likelihood of Palou finding himself in an F1 seat any time soon seemed remote. McLaren already has in its books an excellent young driver who is hungry for F1, O’Ward, and will surely be able to call on a similarly talented driver, Herta, providing Michael Andretti’s dream of taking his Andretti Autosport team into Formula 1 fails to come to fruition.

Yet equally, it didn’t seem likely that McLaren would offer a jaw-dropping salary to Palou just to woo him away from his current team and insert him in an Arrow McLaren SP-Chevrolet. And anyway, it’s hard to think of any driver of real stamp who would trade short-term championship potential for long-term dollars. Therefore, the conclusion is that there’s a tasty Formula 1 promise for Palou in his new deal.

In May and early June, Motorsport.com had contact with some interesting and credible sources – a couple by chance, one very intentionally – and all three concurred that while Palou’s Formula 1 ambitions have been far less overt than those of O’Ward and Herta, he too has his eyes full of grand prix racing. All three sources needed reassurance that I wouldn’t identify them, and all three also admitted they weren’t in possession of all the facts.

A précis of their combined inputs now follows, and frankly it reads like an over-embellished plot for a soap opera. Take it as pure fiction if you wish, but in light of Tuesday’s shenanigans, it perhaps no longer seems quite so outlandish. Here goes:

Some time in late April, as the IndyCar circus descends on Barber Motorsports Park for the fourth round of the season, McLaren CEO Zak Brown has a conversation with Palou. There is mutual antipathy between Brown and Chip Ganassi and he loves the idea of grabbing CGR’s latest champion and adding him to McLaren’s burgeoning roster of talents. Brown can’t yet make promises regarding F1, but having Palou running for his team against Chip’s team in IndyCar will amuse him, if only for a year.

Then, once Daniel Ricciardo decides his future – which surely isn’t with McLaren’s F1 team beyond 2023 – Zak, Andreas Seidl and the McLaren board will have the choice of O’Ward, Palou and possibly Herta regarding who crosses the Atlantic to join Lando Norris in their F1 team. It seems a blissful embarrassment of riches. Brown and Palou reach provisional terms – not a contract, but a verbal agreement based on a number of provisos.

Soon, because he is who he is, Chip finds out about this talk and is understandably furious. Palou’s contract supposedly prevents him talking to rival teams at this point, let alone reaching a verbal agreement. He’s on a two-year-plus-option deal, and until a new contract is drawn up or Chip does/doesn’t take up the option, Palou isn’t at liberty to negotiate with others. Certainly not in April of the second year.

So with a theoretically watertight contract on file, Ganassi says to Palou, “To hell with that, I will take up my option on you for 2023. No salary renegotiation in light of your championship success, same bargain deal I had with you, with Felix Rosenqvist before you, and with Ed Jones before that – and then you can disappear.”

Brown is massively annoyed that this matter has arisen because 1) he appears to have been defeated by Chip, 2) he can’t get hold of Palou until at least 2024, and 3) superficially it seems he’s breached the rules of etiquette between team managers and encouraged Palou to break the rules of his current contract.

And yet, mid-July here we are, and apparently Brown hasn’t been defeated by Ganassi, he has got hold of Palou for 2023, and the only question is regarding who is in the right, who is in the wrong, and whether the truth lies somewhere in between.

[Cue cliffhanger end-of-episode music].

How much of what’s described in the previous four paragraphs is true? How much of it is gossip and exaggeration? Toward the end of last month, I had an off-the-record conversation with Palou, spouting forth my theory, asking him if he could confirm or deny some version of that had taken place and that he was on the cusp of leaving Ganassi. He listened, smiled, laughed, and convincingly persuaded me it was largely b.s., he was happy where he was, etc. etc.

"Psst! Felix! You'll never guess what's happening. I replaced you once, now I'm going to do it again… maybe"

Photo by: Geoffrey M. Miller / Motorsport Images

The only thing we know for sure is that there is considerable ill-feeling floating around, now in full public view thanks to Ganassi announcing on Tuesday that it has taken up Palou’s option, Palou then refuting that and declaring he’s going to depart his current team, and McLaren swiftly declaring it has signed the 2021 IndyCar champion, albeit with his role as yet unspecified.

One of the crucial questions is whether Palou’s current contract with Ganassi states that he cannot negotiate specifically with another IndyCar team. If so, that would suggest that McLaren and Palou have abided by the letter of the law: Palou’s initial public welcome on Tuesday came from the Woking wizards, McLaren Racing ‘as a whole’, and not specifically from the Arrow McLaren SP team. Could that mean Palou will be in F1 as soon as 2023 – unlike O’Ward and Herta, Palou already has the requisite 40 points for a Superlicense – and that Ricciardo has already told McLaren in private that he’ll be standing down from his F1 ride at the end of this season? Or if Wednesday’s statement from Ricciardo can be taken at face value and he will instead race to the end of his contract next year, would Palou be prepared to spend a season as an F1 test driver and race-driver-in-waiting, running the occasional FP1 outing along with the TPC [testing previous car] program?

Ganassi’s managing director Mike Hull re-emphasized to the IndyStar on Tuesday evening that “Alex Palou is under contract with the team through 2023”, and there is a theory that Hull’s comment, and the fact that Ganassi put out its release well ahead of the Palou-McLaren deal being announced, was Chip’s chosen method of publicly reminding all involved that there is a large amount of financial compensation to be paid to CGR should Palou find his way into a McLaren ride in 2023.

That would make sense from one perspective – but would a team as respectable as Ganassi issue a release that also included an apparently fabricated quote from Palou? That would suggest a loss of perspective within the CGR ranks, which is out of character. To me, it seems far more likely that someone hit the trigger on a release that had been prepared in anticipation of Palou remaining onboard to the end of 2023.

It seems inconceivable, too, that the McLaren board would be prepared to pay off Ganassi in order to land Palou who, while the most complete IndyCar driver of 2021, is hardly peerless in terms of blending youth with immense talent. On this side of the pond, McLaren already ‘owns’ one such driver in O’Ward, and there’s another of similar caliber, Herta, who is part of McLaren’s TPC program. In other words, McLaren hardly needs Palou so desperately that it would risk incurring a financial penalty to land him, so it must be confident that dealings with the reigning champ are kosher.

Palou’s decision to depart the team that turned him into an IndyCar race-winner and title-winner has been acrimonious enough that it’s not unreasonable to ask why he would so readily burn his bridges. Think of the stark contrast with Ryan Briscoe who was dropped by Ganassi at the end of his torrid 2005 IRL IndyCar season, yet didn’t whine about it publicly and some eight years later found himself in a one-off Indy 500 entry for Chip. That earned him a full IndyCar season at Ganassi for 2014, and while he was again let go at season’s end, Briscoe didn’t throw anyone under the bus, and was back onboard for the Ganassi-run Ford GT IMSA program from 2016 through ’19. That period earned him 10 wins including two in the Rolex 24 Hours at Daytona.

So what kind of driver is so confident in his future that he would spurn and enrage the owner of one of the finest teams on the planet? Again, an interesting theory has bobbed to the surface: that Palou is not intending to make racing his career for the long haul, or at least, not from the cockpit, and that he’ll retire from driving by the time he’s 30. Not sure how much credence to give that one.

Palou's departure could help cement Dixon's future in the CGR IndyCar squad.

Palou's departure could help cement Dixon's future in the CGR IndyCar squad.

Photo by: IndyCar Series

If this matter has been something of a nuclear bomb in the IndyCar paddock, the fallout is in some ways just as fascinating. The disenchantment Chip Ganassi felt over his dealings with Palou over the last eight weeks meant that he was expecting at least two vacancies in his IndyCar team at the end of 2023, left by Palou and…? Probably Jimmie Johnson.

Had Ganassi been able to retain Palou, he might have tried to persuade Dixon to move across to his Cadillac sportscar squad, but such a proposal could have risked pushing the Kiwi legend to depart for AMSP. The McLaren team has long hankered after the six-time champion and Scott himself is eager to prolong his open-wheel career and delay the full-time switch to IMSA. Tuesday’s news, and AMSP’s stockpiling of talent, may have ruled Dixon out of such a switch but it has also simultaneously made him more desirable to Ganassi’s IndyCar squad. No team owner would want to lose two champions in the space of two years.

Palou’s imminent departure also means Ganassi is on the prowl for a new occupant of the #10 car one year earlier than he intended, for even if Chip wins any legal case over the matter, he’s not going to force a win from a driver who is being retained under duress. In which case, Rinus VeeKay may well be the best available option. He has a high degree of raw talent and to the best of Motorsport.com’s knowledge, he has not yet inked a deal for a fourth season with Ed Carpenter Racing.

But VeeKay has also been a candidate for Arrow McLaren SP’s third car, alongside O’Ward and new-for-’23 arrival Alexander Rossi, should Palou be destined for Formula 1, and Felix Rosenqvist heading to Formula E. Don’t assume that latter move, however: if Palou isn’t slotted into the #7 AMSP-Chevy, McLaren may well be content to stick with the still-improving Rosenqvist.

Meanwhile, this whole affair will likely accelerate the efforts of team owners to lock down their current drivers beyond 2023, or make major plays for the major players who are coming available next year. I would, for example, be surprised if, in 2024, Team Penske-Chevrolet didn’t include current incumbents Josef Newgarden, Will Power and Scott McLaughlin.

Could Herta, with perhaps his F1 ambitions thwarted by Palou’s transition and by the non-existence of an Andretti F1 team, lock himself into a long-term deal with Ganassi? That combo, with Dixon and Marcus Ericsson alongside, could be devastatingly strong.

Whatever the scenario, whatever the line-up, Ganassi will be strong next year, and will be strong in 2024 and beyond; Chip will not be left rummaging through the leftovers. However angry or betrayed he feels right now, he will doubtless pull a masterstroke, and his team will remain a title contender.

Meanwhile McLaren has assembled such a formidable driving force across its various teams that it is putting itself under similar pressure to that mentioned by Jean Todt when he hired Michael Schumacher for Ferrari in Formula 1. Should the various strands of the McLaren team fail to succeed now, they will have only themselves to blame.

Arrow McLaren SP has proven it can run at the front of the IndyCar pack with O'Ward and Rosenqvist in the hot seats.

Arrow McLaren SP has proven it can run at the front of the IndyCar pack with O'Ward and Rosenqvist in the hot seats.

Photo by: Michael L. Levitt / Motorsport Images

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