The Formula 1 teams have reportedly reached an agreement on a new budget cap for 2021 and other cost savings to help the motorsport royal through the corona crisis.

According to the BBC and , the budget ceiling will be reduced by $ 30 million next year, as expected, to $ 145 million (approximately € 133 million). The limit gradually declines further to $ 140 million in 2022 and $ 135 million for the period 2023-2025.

The teams would initially be allowed to spend up to $ 175 million in 2021. However, many racing stables are financially affected by the corona crisis and therefore wanted the budget ceiling to be further reduced.

The new limit will be particularly challenging for Mercedes, Ferrari and Red Bull Racing. The top teams normally spend about $ 400 to $ 500 million a year, while the smaller teams have hundreds of millions less to spend.

Ferrari also fiercely spoke out against an even lower limit in the media, because the Italian team fears having to fire people. McLaren, on the other hand, prefers to see the budget ceiling drop below $ 100 million, but the teams now seem to have found a middle ground.

With this lowered buget ceiling, Formula 1 also hopes that the gap between Mercedes, Ferrari and Red Bull will narrow with the rest. The entire package of measures is yet to be officially approved by motor sports association FIA next week.