The episode opens with a KMUP Special Report. Bernard Shaw reports that international financier and media mogul Ernst Stavros Grouper has just bought a new company. Kermit the Frog and Clifford are watching the report, and quickly realize that the company Grouper just bought is the one that owns the Muppets Tonight studio. Just then three cheerleaders run in, giving a cheer:
Cheerleaders: Grouper, Grouper, give a shout, He's the guy who bought you out. Go Grouper!
Kermit asks them who they are, and they reply that they're the Corporate Raiderettes. One of them hits Kermit in the face with a powder puff. When Kermit asks her why she did that, she replies, "This is a hostile make-over." Grouper runs in then, with his bodyguard Behemoth, and tells the cheerleader that it's "take-over". Grouper is a fish with a patch over one eye. He sends the cheerleaders out to the limo and then turns his attention to Kermit. He tells Kermit that he is in charge now, and nothing will be the same. Grouper begins laughing maniacally, but as the camera pans back we can see it is because there is a leaking canister of laughing gas (N2O) in the room. Everyone starts laughing, including Behemoth.
Kermit intro: "very special guest stars Don Rickles and Coolio"
Grouper starts redecorating Kermit's office, which is now his office. "Now that I'm in charge there will be lots of changes, Virgil." Kermit points out that his name isn't Virgil, and Grouper says, "That's one of the changes. From now on you will be Virgil the Monkey." Grouper explains that monkeys test better in focus groups than frogs. He says that the Muppets aren't hip enough. Clifford disagrees, and points out that their guest this week is Coolio. Grouper asks what kind of sketches they will be doing with Coolio, and Clifford walks over to a monitor to show him one they're taping now, "The Two Homies of Verona".
Coolio and Gonzo the Great are dressed in Medieval garb, and have a short scene where they mix jive with Shakespearean, such as "Yo-eth" and "Yea verily whack." But Grouper calls it trash, and says that the only thing that can improve it is not watching it at all. Behemoth lowers a second eye patch over his other eye. Kermit says that that isn't very nice, but Grouper disagrees -- having his bodyguard intimidate them is what isn't nice. Behemoth grabs Clifford and Kermit and shakes them around a little. Grouper tells him to stop, and then demonstrates what hip is by showing them a trailer from a movie he is producing. The movie is "Enter the Chowder: Manhattan Style" starring Jean Dodd Van Clamme. It's an action movie with lots of seafood jokes -- "I'm your worst anemone," "Life's a bisque," etc.
The scene cuts to a bar, where Muppets Tonight is being watched on the TV by Statler and Waldorf.
Statler: "I give that movie four stars." Waldorf: "Why's that?" Statler: "Because the two that are in it now stink." They laugh. Statler: "Hey bartender, more pigs knuckles." Pig Bartender: "Okay, coming right up." He spits on his fist and hits Statler in the face. Waldorf: "I'll just have the pickled egg." Bartender: "Okay." The Bartender lifts up an egg on a plate. The egg is drunk. Egg: "I love you two old guys." The egg falls off the bar. Statler: "Poor guy cracked up."
The scene changes to the control room, where Kermit -- make that Virgil the Monkey (he is wearing an organ grinder's monkey's vest and cap) -- is introducing Grouper to everyone. Grouper wants to get to know everybody by name. When Rizzo the Rat tells him who he is, Grouper tells him he is now Alfred the Worm. Bobo the Bear is told he is now Whitley Nibbles the Television Elf. This causes Bobo to say, "All right." Grouper then asks Bill the Bubble Guy, who tells him he's "Bob. Raisins come out of my ears." Grouper tells him that he is now Bill, and bubbles come out of his head. Bill says, "It worked. Yes!" Grouper then starts listing the other changes that are going to be made. "Number one, yellow will now be known as the official color of naughtiness. Number two, I expect you all to anticipate my needs before they are spoken." Rizzo pops up and asks, "Number three?" "Ooh," says Grouper, "very good Alfred, my obsequious little worm."
Down in the commissary, Coolio is hanging out with Seymour the Elephant and Pepe the Prawn. Beaker is also there. Seymour and Pepe want to be cool rappers like Coolio. Coolio says, "You want to be bad." Seymour replies that they're already bad, and they want to be good. So Coolio asks them to show him what they can do. Beaker makes a rap beat while the duo rap their song, the one that ends with "Ta-da!" Coolio tells them to never end a rap with "Ta-da!" He tries to fix the lyrics for them, first suggesting to Pepe that instead of saying "I'm a little bit forward," he should say "I keep flavor like Pele." Pepe doesn't like it, since if people think he has flavor they will dip him in cocktail sauce. Coolio trys to fix Seymour's line, "I've got a big behind." Coolio says that a rapper would say "I got back." Seymour asks him where he got back from, and Pepe wants to know if he brought any pictures. Coolio decides to leave the lyrics for the moment and move onto attitude. He says that rap is about how you feel. Seymour volunteers that he feels hungry. Coolio asks him what makes him feel angry, and Seymour replies that not eating makes him angry (Pepe: "This is true."). Coolio switches over to Pepe, and asks him how he feels. Pepe explains how he uses his antennae to feel around. Coolio says, "How do you feel about life?" Pepe says, "I like life. It's a good cereal, especially the cinnamon, okay." Coolio says, "Maybe we should go back to the lyrics."
Back in the control room, Grouper has gotten to number thirty-six: "We will be downsizing the staff." Everyone cheers at this, until Grouper explains that that means he's going to fire some of them. He tells them to go back to work, but Kermit points out that telling people he's going to fire them, and then telling them to go back to work, will destroy morale. Grouper says he realizes this, which is why he has brought along the staff psychologist: Don Rickles. Don Rickles walks in and starts doing his usual insult schtick with the Muppets. Kermit remarks to Clifford that he doesn't see how this is going to boost morale, and Clifford replies, "I feel like I've been Sigmund Fried." Kermit leaves to go talk to Grouper.
Kermit walks into Grouper's office and tells him that just because he bought the studio doesn't mean he can push the Muppets around. "If the Muppets can't be who the Muppets are, then I quit, Grouper, I quit, quit, quit!" Grouper says, "Virgil, my spunky little funky monkey, you cannot quit." When Kermit asks why not, Grouper says, "Because you're fired!" Grouper begins laughing maniacally again, but once again it is only because of the canister of laughing gas. As they all start laughing, Rizzo pops up wearing a mask over his face, saying, "Hey, it keeps them happy."
After the commercial, Grouper runs into the control room. No one is there except Nigel the Director. Grouper asks him where everyone is, and Nigel replies, "Oh they're organizing a coup to overthrow your tyrannical regime. I mean -- ha, ha-ha, ha-ha, ha-ha -- they're knitting you an eye patch cozy." Grouper seems satisfied with the revised explanation, and asks Nigel what they have to put on the air. Nigel shouts that they don't have anything, but then stops himself when he finds a tape of Coolio's first appearance with the Muppets. Grouper grabs the tape and runs onstage to introduce it. Apparently Coolio once appeared on Muppet Star Search. Grouper then has to run back to the control room to put the tape in the machine.
The clip opens with Ed McMahon introducing an act named Chilli Manilli. The act consists of Coolio and Clifford. They are dressed, and are dancing, like Milli Vanilli. When the soundtrack changes songs, and then starts skipping, it becomes apparent that they are lip-synching. Coolio stops the music and tells Clifford that he's going solo. Clifford asks him what he's going to do, since he doesn't sing. Coolio says as how he might just talk the words in a rhythmic cadence. Clifford asks him what he's going to call that, and just then Ed says, "Okay, that's a wrap." Coolio picks up the name, and decides to call it "rap music."
Back in the studio, Grouper is walking down the hall past the closet. Clifford pokes his head out the closet door to watch Grouper go past, then pops back in. All the Muppets are in the closet, plotting the aforementioned coup. Even Behemoth is there, since he's with the rest of the Muppets. Clifford asks him why he works for Grouper, and Behemoth replies, "He may be evil, but he's got an excellent dental plan." Clifford asks all those in favor of standing up to Grouper to take a step forward. They all do, which crushes Clifford up against the wall. He tells them, "Take a step back! Take a step back!" in a muffled voice. Clifford says he wishes there was something they could do to help Kermit, but Rizzo points out that Kermit is probably "relaxing swamp-side, cooking up some multi-million dollar deal to buy the station back."
The scene cuts to the unemployment office. Kermit is in line. An official (played by Fred Willard) is dealing with the man in front of Kermit.
Official: "Well, with your resume and experience the only thing I have available is a twenty-two episode commitment with NBC." Man: "Is it 'Must-See TV'?" Official: "Yes." The man is disappointed. Man: "I'll take it." Official: "I"m sorry."
When Kermit gets to the front of the line, he asks for one of those big network deals. The official says all the big networks are full, so Kermit asks about the "Dubba-dubba-WB". The official points out that they already have a frog. Kermit asks if they need a monkey, and starts making monkey noises. The official dismisses Kermit with a "Next!"
Grouper is in the studio hallway, watching the show on a monitor. Don Rickles walks up and tells him he's talked to everyone, and he'd like to get paid so he can go home. Grouper tells him he can't leave, they have a show to do. Don points out that he fired Kermit, and without Kermit they don't have a show. Grouper says that's not true. He has Don, he has Coolio, and he has a plan.
The shot cuts to the stage, and a set of green flippered feet. The camera pans up to reveal Don, dressed in a Kermit suit, playing a banjo, and singing "It's Not Easy Being Green". He only sings a couple of lines before he stops. He says, "no dental plan is worth this," and quits, but not before slinging a few insults at Grouper.
Statler: "Now I've seen everything." Waldorf: "Good, does that mean we can stop watching?" They laugh. Statler: "Hey bartender, didn't you use to be --" The bartender turns around, revealing that he is Kermit. Kermit: "Yeah, but a guy's gotta work, you know." Waldorf: (to Statler) "Not if he's smart he doesn't."
Back on the TV Grouper is introducing "Muppet Dance Party" with Steve Urkel-o. Coolio comes out, dressed like Urkel and dancing. Grouper wants to do the Macadamia. Coolio asks him if he means the Macarena, but Grouper replies that he couldn't afford the rights so he wrote this one himself. Coolio starts dancing again, but immediately knocks over a fruit stand. Coolio says, "Did I do that?" But then Coolio stops the number, saying the Urkel-o bit is stupid. With an, "I'm outta here," he walks off the stage.
Grouper follows him into the control room, saying that Urkel-o and the Macarena knockoff tested very high in the market research. But Coolio says that market research doesn't know everything, and Grouper should let him do what he does, and let the Muppets do what they do. The Muppets all come into the control room to back Coolio up. When Grouper says that the Muppets aren't hip like Coolio, Coolio says that he's wrong. "Hip is not what you do, it's how you do it." Pepe pipes up with, "You want to see hip? We'll show you hip."
Coolio and the Muppets do a video for his song "Get Up Get Down". They are all dressed in hip clothes, and Bobo and Gonzo have dreadlocks. Pepe and Seymour get to rap a verse.
After the video, Grouper admits that the Muppets are hip, then tells them all to get back to work. But Clifford says they won't work unless Grouper begs Kermit to come back. The Muppets advance on Grouper, backing him up against the wall. Grouper says he can't bring Kermit back without proper focus group testing, so Clifford tells him they've got a focus group right here. "Everyone that wants Kermit to come back take one step forward." They all take a step forward, pinning Grouper to the wall. Grouper finally gives in and heads out on stage. Grouper goes in front of the camera and asks Kermit to come back. The shot cuts to a shop window with a bunch of TVs, all showing Grouper's appeal. Kermit is watching, and he's glad he has his old job back. But as the camera pans over, we see Don Rickles, dressed as an organ grinder, complete with organ. He says, "Not until 8 pm you don't. Now dance, Virgil, dance." Kermit starts dancing and making monkey noises.
The first outtake is from Don Rickles, in the control room, where he is talking to the Muppets. He insults Gonzo's nose. The next is from the bar. The pig bartender tries to talk to the human bartender, but the pickled egg pops up and starts talking. The pig bartender smacks the egg. The rest of the outtakes are all from Don Rickles. There are several from the control room, a couple from the hall, and one from the stage.
Go to the Dennis Quaid episode