This will include a limitation on power unit upgrades, with only limited allowances made for each team’s unique requirements, and will be subject to a token system devised by the FIA.
Beginning in 2021, the cost cap will sit at $145m, down from the $175m originally planned. This total will also change for 2022, falling to $140m before another drop to $135m from 2023-2025.
Exemptions from the cap include driver salaries and teams’ Christmas party budget: up to $1m can be spent on staff entertainment.
“Formula 1 wins today,” said Zak Brown, McLaren Racing’s CEO. “This is a crucially important moment for our sport. F1 has been financially unsustainable for some time, and inaction would have risked the future of F1 and its participants, who are to be commended for resolving this issue collectively and determinedly.
“A uniform budget cap, in concert with more even distribution of revenue among the teams, will ensure greater competition and more people wanting to watch live and on TV, driving more sustained revenues to underpin the long-term financial health of the teams and the sport. Ultimately the fans win, and if the fans win, the whole sport wins too.”