If they were making money, why was it so cheap?

Probably because the actors were all unknowns and wouldn't have been able to demand high salaries. Plus the show had quite a revolving cast,apart from Hasselhoff the vast majority of the big actors in it only stayed a few years and were likely signed on to cheap contracts for their duration. It's only when actors stay long in shows can they negotiate bigger salaries.

That and baywatch was on at a time when tv shows could be run on the cheap despite their popularity. Friends in the later seasons in the early 2000s was really the 1st time tv actors got mega salaries which started the trend. Back then the huge salaries and budgets were more reserved for film.

I recall Jason priestly from bh90210 saying the actors from that got pretty moderate salaries despite the huge popularity of the show and he said the actors of friends caused waves in the industry when it was announced they were to get a million per episode. Cheers finished in 93 and was one of the top shows in the world at the time and Ted danson was on 450k an episode which was seen as a massive tv salary for the 90s but he was on his 11th year as the lead in the show.