Where will CBS get that kind of money to give to one performer?
Can someone explain to me in some kind of detail just how this works?
Its only like 2 million an episode its not that much.
Well, generally what happens is that based on previous seasons, CBS can estimate how much advertising revenue Ray’s show will bring in. Factor in the costs of the show, they can figure out whether Ray’s demands are worth it or not. If they are, then they pay him the $50 million and everyone is more or less happy.
CBS isn’t paying him – they’re paying the producers, Worldwide Pants and HBO. And CBS has apparently agreed to pay $6/mm an episode for the next two years – so there’s a little money to pay the other folks. Also, when the show goes into syndication, there’s more money yet (of which Mr. Romano will get a chunk), so it’s in everyone’s interest to keep him working, making new episodes to sell.
Factor in the syndication rights, too.
Okay. manhattan, you sound like the man (or the woman) with some answers.
So CBS estimates the ad revenue Everybody Loves Raymond will generate next season.
CBS crunches the numbers, and they figure that Worldwide Pants and HBO’s asking price of $6 million an episode is acceptable: CBS can turn a profit for themselves if they pay the $6 million.
So Letterman and HBO get $6 million from CBS; they give Ray Romano $2 million of that; pay all the other salaries and production expenses, then pay their taxes, and whatever is left over is profit for Letterman and HBO.
Is that close, manhattan?
Ooh, hot chicks getting fucked hard! I’m there!
I’d like to be his agent 
Here is the story on his salary:
Give me a break Sultan Sam. Ray Romano pulls in a ton of money for CBS and you don’t think he deseves a good share of it? Maybe during negotiations the producers should say, “You want how much? Don’t you know there is people in this world starving to death?” Oh, by the way,welcome to the boards. 
I definitely missed that episode of Everybody Loves Raymond.
That sounds about right.
A million here, a million there and soon we’re talking about some real money.
CBS may have factored in the idea, which they may have good evidence for, that a hit show will pull in viewers(and ad revenue) on either side of it.
Far be it from me to insult someone in GQ, but you, sir, are a guffle-muffing whosy-whatsit!! Sign thyself up for an economics course right quick-like and then come back and apologize for your drivel.
How capitalism works is like this (this is the short version): if Joe has an item of value and wants to trade it for other items of value, then Joe goes around to find the best price for it and then make a trade. The other person trades with Joe because the other person would rather have what Joe has than what the other person already has; so, both people are better off after the trade than before.
Ray Romano has an item of value–his ability to make television shows that draw an audience, thus prompting companies to want to advertise their products during the show. He trades this item of value for $2 million an episode, which CBS obviously believes is a fair price.
The people that are starving either (1) don’t have any items of value or (2) choose not to trade their items of value for food. Note that all able-bodied people have at least one item of value–the ability to work in some capacity.
Is capitalism fair? Yes and no. It’s fair in the sense that those who have and want to sell items of value are generally able to do so, but it’s not fair in that not everyone is equally imbued with items of value. The fact that not everyone is equally imbued with items of value does not mean that those that are should not be allowed to take full advantage of them.
Every economic system that tried to totally replace capitalism on a wide scale either failed (e.g., USSR) or is in a long drawn-out death throw (e.g., China, Cuba).
OK, that’s enough for today. Go buy some books and read them.
It drives me nuts when people complain about how much actors and musicians make.
I bet Ray Romano works at least 15 hours a day…probably 5 to 6 days a week. It’s a whole lot of work. The director for Chicago collapsed after working 18 hr days for 2 years! with only a handful of off days. Anyone here work 15 hours everyday?
oh yeah, one more thing. Anyone here willing to make below minimum wage (often for nothing) for 10-15 yrs in an industry that has no gaurantees you’ll ever make a penny?
He’s not just a performer, he’s also a writer and a producer.
50 million, feh.
By the time he’s done with the IRS, I bet he only gets to keep about 30. 
Zev Steinhardt
Sultan- surely, you’re not sugegsting that, if Ray Romano accepted a lower salary, the money CBS saved would go to feed the poor, are you? If Ray Romano settled for, say, $40 million, the money saved would be kept by the production company!
Look, it’s one thing to argue that shortstop Alex Rodriguez isn’t worth the money the Texas Rangers pay him (self-evidently, he’s NOT worth it! He doesn’t produce anywhere NEAR enough revenue to justify his paycheck, so feel free to boo him!), but it would be plain silly for people to argue that “the money Rodriguez makes should be used to shelter the homeless.” Because the simple fact is, if Alex Rodriguez took a huge pay cut, the money he lost wouldn’t be used to shelter the homeless! It would simply stay in owner Tom Hicks’ pocket.
So, if you just dislike the capitalist system, rail away. But if not, why condemn Ray Romano (or Alex Rodriguez) for taking advantage of their opportunities?
As others have mentioned, you cannot forget syndication.
It’s important to realize that almost every show loses money in its first-run incarnation. The profit doesn’t begin to pile up until there are enough shows to sell off into syndication, i.e. reruns bought by extended cable, your local broadcaster, etc. The economic model for television programming generally holds that a sitcom will lose money until its 70-something-th episode (that’s into the fourth season), at which point it begins to look like it’ll make it into syndication and will become truly profitable, after which the sponsors are easier to attract, especially for tie-ins (think about all the boxes of cereal Seinfeld kept in his cupboard). But even then, the show will likely be run at or just over break-even while it’s producing original first-run episodes.
Note, however, that the recent reality craze has impacted these economic assumptions. A show like Joe Millionaire is fairly cheap to produce, and it’s therefore possible to make a profit on it, even a healthy one, the first time around. That’s why we’ve been buried with half-ass knockoffs like I’m a Celebrity, Get Me Out of Here and all the rest, because network programmers regard the genre as the new lottery ticket. The problem, of course, is that Joe Millionaire can never really be re-run, so the back end of the profit model disappears.
Even cheaper yet are clip shows, like America’s Funniest Home Videos or World’s Scariest Police Chases or When Animals Put Down the Poker Cards and Chew Off Your Face or whatever. Those shows cost next to nothing, and even if it gains only half the viewership of something like E.R., the fact that it cost only a tenth as much means the profit margin is significantly larger. The upside for the networks is that these shows can be endlessly repeated or chopped up and recirculated in modular fashion. (If you sit through more than a couple of those “crash” video shows, you’ll see that San Diego rampaging-tank footage almost every time, even if the rest of the show around it is different).
And none of this takes into account the latest twist: the DVD collection. As far as the producers are concerned, putting a popular show on DVD is a license to print money. If they don’t bother with fancy packaging and extra features, they can make massive profits on a per-unit basis, given how willing people seem to be to pay fifty bucks to get six or eight discs with a season’s worth of episodes on them. The success of The Sopranos was assumed by the analysts; the success of Friends has been a minor surprise. It’s only a matter of time before Everybody Loves Raymond appears on the format.
So, given all of this, Ray Romano (and Jerry Seinfeld, and the cast of Friends, etc.) can justify $50 million for the season because, ten years down the road, he will be worth a minimum of ten times that amount to the production company. Naturally, he gets a cut of all those residuals as well. The person credited as the “creator” of the show, incidentally, usually gets even more.
So don’t rail against the economics of it. If anything, spend some time thinking hard about why storytelling, even (or especially) throwaway sitcom-style storytelling, is so fundamentally important to society’s collective emotional health.
Wasn’t there a recent news article that Ray didn’t want to do the show any more because there wasn’t any new material? Hmmmm.
I think Jerry Seinfeld was offered $5M per show which he turned down?