George Newman ("Weird Al" Yankovic) is a Walter Mitty-esque daydreamer whose hyperactive imagination keeps him and his friend Bob (David Bowe) from holding a steady job. George's uncle Harvey Bilchik (Stanley Brock) wins the deed to Channel 62, a UHF television station on the verge of bankruptcy, in a poker game. His wife Esther (Sue Ane Langdon) talks him into giving control of Channel 62 to the out-of-work George. George and Bob meet the Channel 62 staff which is made up of the receptionist and wannabe reporter Pamela Finklestein (Fran Drescher), dwarf photojournalist and cameraman Noodles MacIntosh (Billy Barty), an unnamed overweight cameraman (Lou B. Washington), and eccentric engineer Philo (Anthony Geary). George attempts to introduce himself to the rival VHF network station Channel 8, but its owner, the grumpy and mean-spirited R. J. Fletcher (Kevin McCarthy), angrily chases him out. On his way out of the station he encounters janitor Stanley Spadowski (Michael Richards), who had just been unfairly fired by Fletcher for supposedly pitching a very valuable research report, which had been in Fletcher's desk chair all the time. George offers him a janitorial job at Channel 62.
Though George creates new original programming in an attempt to revive the station's fortunes, ratings stay flat and Bob determines that Channel 62 is days away from insolvency after going through the station's books. George and Bob stay late at the station brainstorming ways to keep it afloat, which causes George to accidentally stand up his girlfriend Teri (Victoria Jackson) on her birthday, causing her to break up with him. The next day a despondent George walks out in the middle of filming the kid's show "Uncle Nutzy's Clubhouse" so he can go to the bar. Stanley takes over as host and his bizarre antics are an instant hit with the audience; "Stanley Spadowski's Clubhouse" becomes a massive ratings smash that saves the station from bankruptcy. Channel 62 finds success with a line up of bizarre original shows and Spadowski as its flagship star.
Channel 62 eventually overtakes Channel 8 in the ratings, which infuriates Fletcher. Concurrently, Bilchik loses big at a horse race and ends up with $75,000 of gambling debt that he can't repay. Fletcher offers Bilchik the $75,000 to buy out Channel 62. George learns of the deal and calls his aunt Esther, who forces Bilchik to give George a chance to match Fletcher's offer. George organizes a telethon to raise the money by selling stock in the station and sends network engineer Philo to wiretap the Channel 8 offices, as he fears Fletcher is planning to undermine his effort.
Led by Stanley's boundless energy, the telethon gets off to a quick start but grinds to a halt after he is kidnapped by a group of Channel 8 henchmen. George then leads a group to infiltrate Channel 8 and rescue Stanley. Fletcher airs an editorial criticizing Channel 62 as counter programming to the telethon, which Philo replaces with a recording of when Fletcher insulted the townspeople to Teri earlier in the movie through broadcast signal intrusion. Despite Stanley's return, the telethon ends with the station $2,000 short of its goal, and Fletcher arrives to pay off Bilchik's bookie Big Louie. However, their deal is scuttled by the timely arrival of a beggar that Fletcher insulted earlier in the film, who buys all the remaining shares and allows George to pay off Big Louie instead. The beggar explains to Fletcher that the penny Fletcher mockingly gave him earlier was a rare 1955 doubled-die cent worth a substantial fortune, which explains how he was able to buy the remaining $2000 worth of Channel 62 shares (and a Rolex watch, to boot), while public backlash from the candid video of Fletcher causes the FCC to revoke Channel 8's broadcast license. As the film ends George and Teri rekindle their relationship, while the rest of the employees and fans of Channel 62 celebrate.
Throughout the film, there are cutaway scenes that are comic homages to popular shows, through either George's imagination or shows specifically for Channel 62. A dream sequence includes a music video for Yankovic's "Money for Nothing/Beverly Hillbillies*" in both the audio and visual style of the Dire Straits' "Money for Nothing", and fake commercials for Plots 'R Us Mortuary Service, Gandhi II, Conan the Librarian, and Spatula City are shown throughout the film.
Who offers Bilchik the money to cover his debt?
Fletcher