Formula One teams agree to lower the budget cap, will decrease expenditure by $30 million

Formula One teams have agreed to a cost-cutting package in the wake of financial stress triggered by the outbreak of the coronavirus. Earlier this month, F1 Managing Director Ross Brawn stated that economic priority was key for the sport and all the stakeholders.

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Spending reduced by $30 million

On Friday, BBC Sport reported that an agreement had been reached with all teams to reduce the spending by $30 million to $145 million and the cuts will only increase in subsequent years, taking the overall spending down to $140 million in 2022 and $135 million for the period 2023-25. Friday's agreement still needs to be officially approved by the world motorsport council of governing body the FIA next week.

READ: Formula One Set To Advance Budget Cap Decision Due To Financial Strain On Teams Amid Covid

Earlier Brawn had stated that a Friday's agreement still needs to be officially approved by the world motorsport council of governing body the FIA next week. Speaking to Sky Sports, he had said that the message is clear, costs have to be cut and therefore there’s another big step in the reduction of the cost cap. He said that they started at $175m, that was a long battle to get it there. "With the current crisis we’re now going to start at $145m and the discussion really is how much further we can drive [it down] over the next few years. Today’s meeting was [between the] FIA and Formula 1… and the details will be going out to the teams in the next few days. There’s been a lot of consultation and I think we’re now we’re at the very final stages. It’ll all become clear shortly," he added.

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This season's Formula One races have not begun yet due to the virus and the immediate suspension of all sporting activities. 

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