The Formula 1 bosses have agreed on a budget of $145m for the 2021 season and it would be their final offer to teams as they try to make plans to reduce cost and recover for the losses endured during the period of this pandemic.
At the time of this report, no race has been staged and no one knows for sure when the season would start. The proposal was made known to teams through a letter.
The new budget proposal, which would be the final, is meant to cover 5 years with gradual reductions. $145m has been set for 2021, $140m for 2022, while $135m would be the budget between 2023-2025.
This is almost like a reflection of the suggestions of smaller teams last week who wanted the budget to be reduced from the initially agreed $150m, much to the disagreement of bigger teams.
Managing director of the Formula 1, Ross Brawn had earlier hinted about the final budget, saying that bigger companies that sponsored some teams were eager for a cut in the budget and they had to protect the interest of everyone.
The letter also proposed other things, which have been the subject of past meetings between the Formula 1 and teams, like the matter of compensating teams or manufacturers that offer some of their cars and parts to consumers.
The new proposal would also grant teams that finished at the bottom spot in a season more money to use the following year than they did the previous year, while the team that emerges first would only get 70% of their budget from the previous year.
Teams are expected to vote as a final decision, although it is still unclear whether there would be any need to meet with the organizers. The vote might not be unanimous as big teams still do not like the further cuts.
Ferrari has been very vocal about their dissent and Matteo Binotto, Ferrari boss, had begged teams not to allow emotions to allow them to make hasty decisions.
The budget cut could cause big teams to layoff some staff in a bid to save costs. The need for a unanimous vote is no longer needed as Formula 1 can now make decisions based on the agreement of just five teams.
Written by: Leon Osamor