Mercedes team boss Toto Wolff says the subject of money remains the "elephant in the room" when discussing Formula One's future beyond 2020.

The teams' existing commercial contracts -- struck by Bernie Ecclestone under F1's previous ownership -- are due to expire in 2020 and negotiations with new owners Liberty Media are already underway for 2021 and beyond. Liberty is hoping to use the end of the existing contracts to level the playing field between large teams like Mercedes and F1's smaller outfits, but has already faced a quit threat from Ferrari after simply broaching the subject.

While a cheaper set of engine regulations and a budget cap are on the agenda, Wolff says the most contentious issue is still the distribution of F1's prize fund beyond 2020.

"Well that's the elephant in the room," he told ESPN in an exclusive interview. "That's the most important topic after 2020. It is clear that we need to find a structure that works for everybody. Some of the smaller teams struggle on the income side.

Sutton Images

"We are not against a cost cap as long as it can be policed in the right way and it has a sensible system [of introduction]. We are not going to cut our workforce by 30 percent from one year to another and we are not going to give up a performance advantage that we have lightly, so there needs to be something on the other side.

"These discussions have just started in a friendly way, and again here we acknowledge that we might have different opinions. But at the end, for the sake of Formula One, we will find the right solutions."

Asked if he would follow the lead of Ferrari president Sergio Marchionne and consider pulling Mercedes out of F1, Wolff said: "Sergio is pretty outspoken and straight, and he comes to the point. He says that he wouldn't accept certain things and it's his way of dealing with things -- and in principle I share his opinion.

"I have said it in Abu Dhabi that we love Formula One, we are in here to stay but it needs to have the right framework -- governance framework, regulatory framework, it needs to be managed in the right way and we will voice our opinion if we think things are not going in the right direction."

Mercedes has dominated Formula One under the current set of regulations and has invested a significant amount of money in developing its turbo hybrid engine. Any major changes after 2020 could upset the team's position at the top of the sport, but Wolff insists Mercedes will not resist change simply to try to protect its position.

"We are all up for it," he said. "We like the challenge, we understand the shortcomings of some of the current regulations -- it needs a fight at the front and we embrace the fight.

"I think it's important to acknowledge that the other side might have a different opinion on things. I don't think there are massive barriers between us on the engine. They recognise it needs to be high-tech and we don't want to develop a completely new engine, so there is pretty much an alignment there.

play 0:31 Toto Wolff talks to ESPN Get a sneak peek of what's to come as Mercedes F1 executive director Toto Wolff sat down with ESPN to talk 2017 and beyond.

"We need cars that are fast and spectacular, but you need to be able to overtake. We need to have a percent of the attention, we need tracks that you can overtake and where mistakes are being penalised, so this is our job and we actually want it to prosper.

"We can cope with any regulation change. There is no team in the world that has won with every single championship and this is something that we are pretty realistic about."

However, Wolff is still pushing for the next set of engine regulations to retain the MGU-H (the part of hybrid system that recovers energy from the turbo). The MGU-H has proved expensive and difficult to develop, but Wolff would be willing to offer a supply deal for struggling manufacturers in order to keep the technology.

"I think we are halfway there [with the engine proposal]. We don't like the cutting of the MGU-H -- a high-tech piece of equipment -- we would rather like to supply the H to some of the teams that lack the technology or some of the OEMs that lack the technology. The devil lies in the details but the conversations are going in the right way."