F1 bosses will meet this week to discuss a reduction of the budget cap figure to $145m (£117m) in 2021.
The new level has been arrived at after a meeting on Monday between F1 chairman Chase Carey, managing director Ross Brawn and FIA president Jean Todt.
F1 is also closing in on plans to re-start the season in Austria in July amid a tightly controlled environment.
Bosses want to carry out coronavirus tests on all staff before they travel and every two days while at races.
Teams will be separated from each other at the event and stay in different hotels, and will be taken to and from the race track by buses.
The plans are being agreed with the national governments involved and F1 plans to brief the Grand Prix Drivers’ Association to reassure the drivers that bosses are not taking any risks with participants’ health, nor are they being a burden to the countries that will host races.
F1 is increasingly certain that its plan to start the season in Austria with two races on 5 and 12 July is viable – assuming there is a not a sudden spike in coronavirus cases in the country.
The hope is to follow the events at the Red Bull Ring with two at Silverstone on 19 and 25 July, but financial terms for the British races have not been agreed.
Budget cap progress
Teams reached an impasse on the budget cap during a series of meetings last month, with Ferrari leading objections to lowering the cap below $150m and some other teams – most vocally McLaren – pushing for a much lower figure.
Carey, Todt and Brawn agreed a compromise plan on Monday whereby a new lower figure of $145m would be installed for 2021, and talks would continue in the coming weeks on lowering it further for 2022 and beyond.
This will be presented to the teams in a letter from the FIA and F1 ahead of a discussion by team bosses.
The rules currently enshrine a figure of $175m (£137.9m) for 2021, which was agreed last October. But the impact of the coronavirus crisis on F1’s finances has led to moves to lower it.
Teams have already agreed informally to lower that figure to $150m but have so far failed to agree on a lower number.
The hope is that Ferrari will move sufficiently to accept the $145m figure this week and can be persuaded after further talks to move beyond that in future years.
The Italian team say their biggest concern is over the number of redundancies that would be involved if the cap was lower than $150m.
Mercedes have similar concerns but have indicated that they would accept a figure of $145m – as long as overall spending is also addressed, including a limit on engine development costs, which is currently one of a number of exemptions from the cap.
Brawn told Sky on Monday: “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 really is how much further down we can drive the next few years.”
What about the season?
F1 is hopeful it will be able to firm up at least the European portion of the season within the next two to three weeks.
After the Austria and Silverstone events in July – assuming the terms for the British Grands Prix are agreed – a number of options are being discussed, with a further four races to come from a selection of Spain, Hungary, France, Belgium, the Netherlands and Italy.
Some of those countries have restrictions on mass gatherings until close to the end of the summer – Hungary’s is until mid-August, those in Belgium, the Netherlands and France until the end.
But F1 is in talks with national governments on the basis of the isolation model that it will operate in Austria and is optimistic countries will agree races can take place behind closed doors on the basis that they will present minimal risk of spreading the virus.
After Europe and into the northern hemisphere autumn, plans are considerably more fluid.
Singapore has to take place on its original date of 20 September if it is to take place at all; and Canada must also be held during that month because of the early onset of winter in Montreal in October. Neither event is certain.
Russia and Azerbaijan would follow whichever of the Singapore and Canada races can happen, before a move to Asia and Japan, China and Vietnam, then on to the Americas and the Middle East, ending the season with the final two races in Bahrain and Abu Dhabi.
Of those events, Russia, Azerbaijan, China, Bahrain and Abu Dhabi are considered most certain, with varying degrees of uncertainty hanging over the others.
Beyond that, plans depend on the development of the virus situation in each country and F1 will likely have to delay confirming a schedule until that becomes clearer.