Reigning F1 champion is currently unemployed and expects significant drop in income.

Nico Rosberg’s shock decision to retire immediately after becoming F1 world champion comes with one clear cost – the chance to defend his title. But what will the financial consequences be?

In the euphoria of securing the Formula 1 World Drivers' Championship and deciding to retire from the sport with a view to spending more time with his wife Vivian Sibold and year-old daughter Alaia, Nico Rosberg may not have realised that with retirement comes unemployment and a significant drop in income.

Not that it really matters, in his case. A canny investor who has long since kept abreast of the business pages and stock market, Rosberg lives the simple version of the high life, despite the Monaco address.

A smart operator

Instead of running his own signature private jet, short-haul races in the summer see Rosberg among a clutch of Cote d'Azur-based drivers who share the cost of hiring a plane. Money is invested in property, and in enterprise, with a diverse range of business interests neatly spread to minimise risk.

The multi-millionaire world champion is hardly headed for the poor house. Even forgetting the contract that was supposed to see Rosberg behind the wheel of a Mercedes until the end of 2018, for the past three years the German racer has been taking home an estimated $15.5 million from the team, with personal endorsements on top.

But Rosberg's relationship with watch and jewellery designer Thomas Sabo – his only personal sponsor, in a deal thought to be worth $1 million per year – came to an end before the start of this year.

At the time, Rosberg explained that he wanted to focus his attention on his existing commitments to Mercedes' team sponsors and partners, freeing up more time to devote to his fight for the world title.

One of those team sponsors – luggage manufacturer Tumi – named Rosberg one of its two brand ambassadors in a separate deal in 2015; the relationship continued into the current year but its future is no longer clear.

Nico Rosberg, Mercedes AMG F1, Toto Wolff, Mercedes AMG F1 Shareholder and Executive Director
Nico Rosberg, Mercedes AMG F1 on the podium with Mark Webber, Porsche Team WEC Driver / Channel 4 Presenter
World Champion Nico Rosberg celebrates

Giving up $22.6 million per year

Had Rosberg raced on, and stuck with the terms of the two-year, $22.6 million per annum contract he had agreed with Mercedes during the summer, he would have been in a strong position to capitalise on his championship success, working with two or three carefully selected high-end brands – top-tier Swiss watches, designer fragrances, and so on.

Quitting F1 rather reduces those options. In his retirement speech, Rosberg emphasised that his motivation for leaving the sport was to spend more time as a husband and father, putting in the bathtimes, bedtime stories, and family holidays that are all too rare when one's job demands a life spent on the road.

High-profile it isn't, however, and it is a decision that means Rosberg is unlikely to now receive a heap of sponsorship offers.

Where Rosberg is likely to cash in, however, is if he becomes a brand ambassador for Mercedes. In exchange for hot-laps at various corporate events and exhibition driving of old 196 streamliners whenever the promotional opportunity arises, plus the odd bit of after-dinner speaking, Rosberg could command an annual salary in the low seven figures.

All of this while keeping a low public profile and concentrating on the quiet family life that he desires.

Read also:

A future in TV?

Another option for Rosberg – although far higher-profile – would be for one of the broadcasters to secure his services as a pundit.

Not only are world champions valued highly for their input in the commentary booth and in the pre- and post-race TV coverage, but the multilingual Rosberg could take his pick of English, French, German, Italian or Spanish language television and deliver content in the viewers' mother tongue.

He is both highly intelligent and an eloquent speaker, and could set his own terms, demanding to travel to only certain rounds while covering the rest from a local studio, close to his family.

Martin Brundle is estimated to earn more than $629,000 a year from Sky Sports F1 for his services; the articulate Rosberg could command similar.