$23M Alex Palou controversy leads Arrow McLaren to lose major IndyCar sponsor: Report

Image Credits: Getty, L: Nolan Seigel; R: Alex Palou
Image Credits: Getty, L: Nolan Seigel; R: Alex Palou

The primary sponsor for the No.6 Arrow McLaren Chevrolet entry, NTT Data, is reportedly going to leave the Papaya team at the end of the 2026 season. It is believed that Alex Palou’s decision not to honor the McLaren contract played a significant part in NTT's decision to part ways.

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NTT Data had been a long-term sponsor for Chip Ganassi Racing, with the first deal being signed between the two parties in 2013 for the one-off Indy 500, before coming on board as a full-time sponsor for 2014. The partnership continued until the end of 2022, before the Japanese multinational signed a deal with Arrow McLaren.

As per the reports, Alex Palou’s contract with McLaren played a significant role in NTT Data’s deal. The Spaniard had previously raced with NTT as the sponsor for his Chip Ganassi Racing entry from 2021-2022. The deal was signed just weeks after Palou signed with the Papaya team.

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Alex Palou decided not to honour the Arrow McLaren contract ahead of the 2024 season and decided to stay with Chip Ganassi Racing. NTT Data, which had signed under the pretense of Palou joining the Papaya team, then went into negotiations with the team.

NTT initially signed a six-year deal with McLaren in 2022, meant to run until the end of the 2028 season. The renegotiations gave the Japanese multinational the opportunity to end the deal after four years, i.e., the end of the 2026 season.

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NTT INDYCAR Series Ontario Honda Dealers Indy Toronto - Source: Getty
NTT INDYCAR Series Ontario Honda Dealers Indy Toronto - Source: Getty

Arrow McLaren also filed a lawsuit against Alex Palou regarding the damage incurred by the team as the Spaniard failed to honor the contract. Out of the $30M lawsuit filed by the team, $23M of losses are reportedly incurred from the renegotiated deal with NTT Data.

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The renegotiated deal led to a reduced annual sponsorship, resulting in losses of $7,266,902. McLaren F1 also reportedly lost $15,564,970 in sponsorship benefits, with the total losses amounting to nearly $23M

According to the latest reports, NTT Data has decided to end its sponsorship of McLaren at the end of the 2026 season. The Japanese multinational will also be putting an end to its deal with the McLaren F1 team after the end of the next season.

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Amid all this, Arrow McLaren announced its partnership extension with two major sponsors.

Arrow McLaren announces partnership renewals with Mission Foods and onsemi

Mission Foods first signed a sponsorship deal with Arrow McLaren in 2020 and has been with the team ever since. Onsemi, on the other hand, joined the Papaya team ahead of the 2023 season and has been a primary sponsor on the No.6 Chevrolet for four races in the last three seasons.

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The Papaya team announced a contract renewal with both these sponsors on September 9, 2025.

“Our family of partners are critical to our team’s success, and we are thrilled to have Mission Foods’ and onsemi’s support continue into next season and beyond. They’ve become familiar names within our sport, and they love both racing and INDYCAR. We’re proud to continue to collaborate with them and provide one-of-a-kind experiences for their organizations and their guests at track,” said Arrow McLaren’s President, Kevin Thimjon.

As NTT Data reportedly will make an exit after the 2026 season, both Mission Foods and onsemi have signed with the team through 2026.

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Edited by Pranay Bhagi
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