As the white flag waves on 2022, we asked RACER.com’s writers to reflect on the story from this year that resonated the most with them, based on any criteria they saw fit. Today, Marshall Pruett recounts the drawn-out contractual tussle over the future of the reigning IndyCar Series champion, Alex Palou.
Was it worth it? One driver, two contracts, unending drama that cost each side hundreds of thousands of dollars in legal fees, all to end up in the same place where they started?
The exhausting saga engineered by Alex Palou to try and leave his Chip Ganassi Racing team and sign with Arrow McLaren SP might have provided entertainment for fans of trainwrecks, but it did nothing to help the series gain a bigger audience or improve its television ratings.
Sure, it was amusing in its early stages when it blew up during the days leading into the Toronto race, but the situation quickly devolved into a sad and bizarre reality as the reigning IndyCar champion became the first driver I can think of to continue driving for a team while being sued by his team.
Coming off his unexpected rise from Ganassi newcomer to Ganassi’s newest title winner in less than 12 months, Palou wanted a new contract that paid him like an elite talent. His boss wanted him to honor the contract he signed which, at a rumored $100,000 to $200,000 per year with no known clauses to make Palou a seven-figure earner if he won the championship, might go down in history as the worst IndyCar contract negotiated and executed by driver’s management group.
Convinced they could get him paid elsewhere through a loophole in that contract, Palou’s managers presented this slam-dunk scenario to McLaren and its CEO Zak Brown.
The entire episode took IndyCar to new and embarrassing places, and in the context of how I’ll remember the 2022 season, Palou’s failed jailbreak sits like a stain on top of the year. Where intense on-track battles and compelling championship themes should have taken center stage, we spent half the season embroiled in this slapdickery.
Palou’s teammate Marcus Ericsson won the Indianapolis 500 as CGR dominated the event from start to finish and the Swede rode the double-points bump to the championship lead for all but one of the next seven races. As eventual champion Will Power and the surging Josef Newgarden chipped away at Ericsson’s lead, they were relegated to the background while the needless idiocy surrounding Ganassi’s suing of Palou and Palou’s countersuit of Ganassi held sway as the main focus heading into every remaining round.
The layers of nonsense built to new heights as the story dragged on until it met a surprising end right after the season concluded in September. Lawsuits were dropped, Palou would stay, McLaren’s Felix Rosenqvist — who would have been moved aside for Palou — got to keep his seat for one more year, and joint press releases were distributed which confirmed a cease-fire agreement had been reached.
In the end, Palou received the salary increase he wanted, was given permission to play a testing and reserve role for McLaren’s Formula 1 team and ensured there would be no contractual strings to keep him at Ganassi after 2023. In that regard, you could say he won whatever the hell took place last summer.
Palou will, with 100 percent assurance, be announced as McLaren’s newest IndyCar driver once he clears the date in his revised contract that allows for negotiations with other teams. What he wanted for 2023 will simply be deferred to 2024.
Despite its upcoming success in acquiring Palou, McLaren didn’t necessarily come away with clean hands and a sterling reputation. To start, it lost its widely respected IndyCar president, Taylor Kiel, who shocked the team by leaving shortly after the Palou situation was resolved.
Although he declined invitations to share the reasons he chose to leave, it was suggested the Palou contretemps and being blindsided by the move caused irreparable damage that led Kiel to give notice and seek a less tumultuous workplace. He was confirmed as Ganassi’s newest team manager in November.
If there’s a positive angle to come from this stain, it’s in the ensuing business that’s been done in reaction to Palou’s contractual fight.
Newgarden, set to enter free agency as the biggest talent to try and hire after the 2023 season, was taken off the board with a new contract extension from Penske. Andretti Autosport’s Colton Herta, another keystone driver who was on the free agency horizon, was signed to a new long-term deal that makes him the highest paid star in the paddock.
Faced with Palou-inspired fears about their race-winning drivers plotting against them and looking for ways to break free from existing contracts, the smart team owners took action to ensure they avoid their own one-driver-two-contracts nightmare.
If we’re fortunate, lessons from this caustic exercise have been learned and the same mistakes won’t be repeated.