Audio Transcript:

MARCO WERMAN: Toyota is looking to the future in other ways, too. The car manufacturer also runs a Formula One motor racing team. But the team, and seven other teams, have decided to pull out of Formula One and set up an alternative competition starting next year. The World's Alex Gallafent is with me. And Alex, this is a dispute first about money, but first remind us what Formula One is.

ALEX GALLAFENT: Well, Marco, there's only one way to give you a sense of it. It's this. I love that sound.

WERMAN: Oh, yeah.

GALLAFENT: Formula One is the most watched motorsport championship in history. It attracts a global audience � young people, old people, the wealthy, the not so wealthy. It's got iconic racetracks � think of the Street Circuit in Monte Carlo, when they're kind of going around the twisty corners of Monte Carlo. It's got historic teams, think of Ferrari. And during the season, it just travels, globe trots across the world every couple of weeks, in this ultra high-tech, automobile engineering road show � Bahrain, Brazil, Australia, Malaysia, France � all over the world. It's incredible.

WERMAN: And speaking of Brazil, I remember going from the airport in Sao Paulo, the great late Brazilian race car driver Ayrton Senna's car which was crashed, and he died in that crash, the car is actually a statue on the highway there.

GALLAFENT: Right. It's absolutely unbelievable. In Italy and Brazil, it's, you know, kind of a secular religion there, if that's not a contradiction in terms. And it has a extraordinary impact financially as well. Formula One is this global, sexy billboard for advertisers, just a massive sponsorship opportunities for companies all over the world.

WERMAN: And we should distinguish for our listeners between Formula One and Indy cars. The Indy cars being the cars that race at the Indianapolis 500.

GALLAFENT: Right. Well, Indy cars are pretty similar to one another. There's not a huge amount of difference between the cars. You know, a lot comes down to the drivers. They drive on oval circuits. Now, drivers are very important in Formula One, too, but the cars themselves are phenomenally expensive. They're just kind of showcase vehicles for nearly all the top engine and tire manufacturers in the world.

WERMAN: So the big news in the sport now is that 8 of the 10 F1 teams currently competing are breaking away from Formula One.

GALLAFENT: Right. So the organization of Formula One kind of falls into two camps. On the one hand, you've got motorsports governing body, the FIA. They set the rules. On the other hand, there's the ten teams that own the cars and employ the drivers. And next year, from next year, the governing body wants teams to operate within a budget cap of about $60 million dollars a year, which is small in Formula One terms.

WERMAN: Right. Sounds big, though.

GALLAFENT: It sounds big, but they argue that in the current economic climate, for teams to keep on spending more and more money each year, it's just unsustainable.

WERMAN: But these teams are gear heads. I can't imagine they're going to be too happy with that. They want to spend money.

GALLAFENT: They want to spend money, and they want to be free to run their teams as they see fit. So they're basically rejecting that budget cap.

WERMAN: So what's going to happen next year? Are they going to go along with this or what?

GALLAFENT: Well, if there's a breakaway series, you've got 8 of the best teams in the world no longer part of it. So currently there are only 2 teams that have signed on for next year's official Formula One championship.

WERMAN: Doesn't make a very fun race, does it?

GALLAFENT: No, it doesn't. Now, there are 3 new teams that are planning to enter, including one from the United States. The question is will they be really excited about joining Formula One if the big names, including Ferrari, aren't there to race with them.

WERMAN: Will there by any chance of a compromise between kind of like the old Formula One drivers and teams and this new alternative scenario?

GALLAFENT: Who knows? These are big personalities at play, here. Sometimes you hear in sport, �No one player is bigger than a sport itself.� That might not be true in Formula One. The fact that Ferrari is part of this rebellion is absolutely crucial. They're like the Yankees, the Red Sox, and the Dodgers all rolled into one. And here's Murray Walker, a British motorsport commentator.

MURRAY WALKER: Ferrari's are the lifeblood of the sport. If they weren't taking part, Formula One would be a very pale shadow of its previous self.

GALLAFENT: I think that's right. More news today. The FIA, the governing body, has announced plans to file legal action against the breakaway teams. But you know what? This sport can't sustain two championships. There's going to be a winner and there's going to be a loser.

WERMAN: Vroom, vroom. The World's Alex Gallafent. Thanks a lot.

GALLAFENT: Sure thing.