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Formula One Avoids Walkout with Agreement

A deal has been reached between Formula One's world governing body, and there will not be a breakaway competition next season.

The International Automobile Federation (FIA) and the Formula One Teams Association met Wednesday in Paris after weeks of bitter fighting over a proposed $65 million spending cap for 2010.

Ferrari and seven other teams had threatened to pull out of Formula One next year and form a rival competition if the FIA insisted on the spending limits. The governing body wanted the spending limit to allow new teams into the competition and keep others in the sport, but teams said it would lead to a two-tiered championship.

FIA President Max Mosley said that the two sides agreed to a reduction of costs. Mosley said that the goal is to get spending back to the levels of the early 1990s within two years. In 1992, it cost between $50 million and $75 million to operate a Formula One team.

Also Wednesday, Mosley agreed not to run for re-election. The 69-year-old Briton has been the president of Formula One's governing body since 1993. Formula One's supremo Bernie Ecclestone said after Wednesday's agreement that he was glad 'common sense had prevailed.'

Some information for this report provided by Reuters