Formula 1’s managing director, Ross Brawn, has said an agreement over a reduced budget cap is now in the “final stages”.
All 10 teams, along with the Formula 1 and the FIA, have been holding regular meetings about the proposed budget cap, which was initially set at $175m a year.
But, with the current global health pandemic freezing nearly all Formula 1 activity and putting a stop to racing completely, there has been more urgency to protect teams, especially the smaller outfits, as they miss out on revenue in the region of $2m per missed race.
The financial effects of lockdown will be felt long after a semblance of normality is restored, but the likes of Ferrari and Red Bull have been refusing to play ball on reducing the budget cap further. Some have pushed for $145m, others want it as low as $100m.
However, after much deliberation and clashes between teams, Brawn feels that some more common ground has been found between everyone and $145m will be the new benchmark for the budget cap in 2021.
“Today’s meeting has been between the FIA and Formula 1,” Brawn revealed on Sky Sports’ The F1 Show.
“And I think we’ve reached a conclusion. The details will be going out to the teams in the next few days.
“There has been a lot of consultation and I think now we are at the very final stages, so it will all become clear shortly.
“We started at 175, that was a long battle to get it there, and with the current crisis, we’re now going to start at 145.
“The discussion now really is how much further down we can drive the next few years.
“The budget cap’s initial objectives were to produce a more competitive field. I think with the situation we have now, the economic sustainability of Formula 1 is of top priority.
“That counts for the big teams just as much as the small teams. The message is very clear: we have to cut costs.”
Some Formula 1 teams have also been pushing to freeze the introduction of the new regulations until at least 2023, but Brawn confirmed that the currently agreed one-year delay will remain in place.
“The new regulations will definitely come in in 2022,” Brawn said.
“There is a justifiable need to push these current cars into next year, but the initiatives we want to bring in are to make the sport more economically viable.
“The cars we have now, they are so complex and the more money you spend then the quicker you will go. We need to level off that slope.
“We need the new cars to even that slope out.”