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Formula One F1 - Monaco Grand Prix - Circuit de Monaco, Monte Carlo, Monaco - May 26, 2019, General view during the race. [REUTERS/Benoit Tessier/File]
Formula One's governing body hailed a major step forward on Wednesday after approving a package of cost-cutting measures including a $145 million budget cap from next year.

The measures, rubber-stamped by the FIA's World Motor Sport Council by an online vote, aim to create a more level playing field for the 10 teams and a more sustainable future.

"Formula One wins today. This is a crucially important moment for our sport," said McLaren Racing chief executive Zak Brown, who had pushed for an even tighter budget restriction, in a statement.

"F1 has been financially unsustainable for some time, and inaction would have risked the future of F1 and its participants."

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FIA president Jean Todt thanked the teams and hailed "a major step forward for F1 and motorsport's sustainability".

The budget cap will be reduced to $140 million for 2022 and $135 million for 2023-2025, based on a 21-race season, the FIA said in a statement.

Some top teams spend well over $200 million a year at present.

A list of components will be frozen between 2020 and 2021, including the chassis and gearbox, and there will also be a further reduction in aerodynamic testing.

This will be according to championship position, with more restrictions for the more successful teams in a development handicap system.

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"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," said Brown.

The current season has yet to start due to the COVID-19 pandemic and when it does, likely in July, it will be without spectators.

Team principal Andreas Seidl said McLaren were pleased teams would have enough aerodynamic freedom to retain the competitive element.

Sweeping new regulations are due to come into effect in 2022 after being postponed from 2021.

Sportscar maker McLaren announced redundancies on Tuesday, with the likely departure of some 70 people from the F1 team to meet the budget cap requirements.

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"Adjusting the way we work and right-sizing the team to this new cap over the next months is a massive and painful task," said Seidl. "But our aim is to be the best-sized and most efficient team in the future." 

Formula One' World Motor Sport Council covid-19
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