Michael Rushton, star of Damacles wants to direct, the staff doesn't want him to. Unfortunately they have no choice as its in his contract. At the same time Siobahan wants to spread her wings and try something other than Beaver Creek and so Alan gives her a role on Damacles. Victor's nephew Ted, on a rehab release comes with him to spend a few days at the office, and instantly hits it off with everyone including Alan. Within hours he has pitched a whole New Media division to Alan and begins working on a Sword of Damacles video game. Alan orders Richard to babysit Damacles while he attempts to direct the show in an effort to keep it somewhat on budget, and on time.

Beaver Creek receives an award from a right wing advocacy group for its family positive message. Of course, the whole thing blows up in their face when the Pastor and Blacksmith announce they are marching in the Gay Pride parade in character. Alan assigns the task of fixing the Beaver Creek problem to Victor. He of course makes the problem even worse after faxing an inflamatory memo to the Pastor demanding he not march in the parade. The Gay community is outraged and they announce they will be protesting in front of the Pyramid building. Meanwhile, Richard convinces Alan to option an unpublished book by an author without actually reading the book first. The entire thing blows up in their faces when the book turns out to be terrible, and totally unproducable. Victor and Richard beg Veronica to help them, and she does in exchange for a series of future favours. In the end she gets out of the book deal, and appeases the gay community by volunteering Victor as Grand Marshall of the

Captain McGee, star of the company’s acquired children’s show is found out to be a wife swapper with his girlfriend while a German executive is given the cold shoulder as Pyramid employees try to sell him Beaver Creek as being “young and hip”.

Beaver Creek during sweeps week is 'lucky' enough to land aging fading star Dian Del Largo. The actress writes a new deffintion for high maintence after she fires the director, and demands Lisa play the part of Director. After a mixup with a delivery boy Dian fires Lisa and appoints Victor the new director. Her antics delay production and then has an anxiety attack on set that sets them back even farther. Richard finally calls in the Diva master (Gino Empry) to save the day and get the show back on schedule.

Alan is thrilled with a new management book he has found and is becoming obsessed with the idea of connecting nine dots with four straight lines (without any of the lines crossing) He instructs Richard to find a way to make Beaver Creek more interesting to the Americans. They decide to add an Asian to be a David Carradine character. The changes prove to be disastrous but end up being a setup by Alan. (Another management technique) Meanwhile, he is leaving Veronica completely outside of the loop leading her to believe she is being fired. She becomes so dispondant she gets drunk with Victor and later sleeps with him. Alan calls her into his office the next day only to throw her a surprise birthday party. Veronica, now even more furious announces that not only was her birthday six months ago... but that she was so upset she slept with Victor.

Alan decides Beaver Creek sucks after watching one of the episodes against the advice of everyone and fires the entire staff. He puts Victor in charge of directing, Veronica in charge of the budget, and Richard in charge of making sure the program is watchable, and he runs off to play golf, badly.

Alan's in a bad mood, so he cancels Christmas. The staff rebels against the idea and faxes a copy of the memo to the newspaper earning Alan the name ""The Grinch"". He decides to rectify the situation by donating the normal Christmas money to a needy family he can exploit. Meanwhile Alan seems to be cursed after a group of Wiccan's complain that Beaver Creek shouldn't say Merry Christmas, but ""Happy Holidays"". The needy family turn out to be actors hired by Alan. Richard returns the gift and he and Victor deliver the money to the real Todd family and watch them from across the street as they discover the gift.

A hard hitting journalist wants to do a piece on Pyramid. The group is nervous since she tends to expose all of the dirty little secrets within a company, and within Pyramid, there are plenty. Richard coaches the group in an effort to make them seem better then they are. The piece however turns out to be nothing more than a fluff piece on powerful fathers, and their daughters. That information however doesn't make it back to Victor who decides to dig through Diane's (the journalist) things to find something to blackmail her with. He finds a needle and threatens her and orders her out. The piece is then redone as a full hour expose on the problems of Alan Roy. Meanwhile, Alan has decided to write a script about Dental Surgeons. He is so paranoid that someone will steal his ideas he has them all written on red paper. Unfortunately his paranoia seems real when the office temp skips off to NBC to pitch to pitch the idea, and its picked up as a series.

Alan discovers the healing power of magnets and orders everyone to begin wearing them in their shoes as they prepare for the big television convention NATPE. They Pyramid gang begins working on a new 13 minute daily news show that will stream to every highschool in America but soon learn that Alan's arch enemy is also making his own project. At NATPE Richard straps the magnetic shoe inserts to his arms and proceeds to wipe all of Moses' pilots. His actions work, but not before Moses discovers his treachery resulting in him getting hired by Moses to run his new Bogota, Columbia station.

Richard is still trapped in Bogota working at one of Moses' new stations. The Industry Leader is still mad over the scam he pulled in the previous season finale. Moses sends Richard out into the Jungle by helicopter and the chopper is shot down. Richard is forced to return to Canada in a container with a group of illegal immigrants where he befriends a man who speaks no English. Back at Pyramid all is not well. The shareholders are out for blood after they learn that after their worst set of losses in the company's history Alan has given himself a huge bonus. Veronica is trying to douse the crisis. Meanwhile Wanda's attention is focussed on an Elian like child named Manolo on the television news. Richard returns to Pyramid surprising everyone, seeing as how they thought he was dead. Alan wants the group to track down Manolo's agent as television companies all over the world fight for the rights to his story. Richard returns again to Pyramid after a meeting with Moses with Man

Pyramid wants to make a new Beaver Creek movie using the original star, Mandy who's not thrilled with the prospect of returning since she accuses Pyramid of stealing her chidlhood. Alan has a new theory on successful television series. Using his new flowchart that links Baywatch, Flipper, Beach Combers, and Gilligan's Island he creates a program about ‘water' where water is the star. Alan uses a new computer program to write a script for his new movie Water. Richard smuggles a copy of the script to Mandy who is desperate to hurt Alan with the understanding that it's a terrible script, but something happens. She loves it, and agrees to sign on for the next two Beaver Creek movies if she gets the lead in Water.

Contrary to popular opinion, Alan sees no future for the Internet. Richard and Veronica dabble in a little insider trading after Pyramid is approached for their content by a happening Internet company. Meanwhile, Victor hits the rave clubs.

Wrongly imprisoned Dean Sutherland attempts to sell his story to Pyramid as a movie of the week. Alan, however has reservations as he does not trust the DNA evidence that freed him and points the finger at Sutherland when his new Palm Pilot goes missing. Meanwhile, Wanda and Veronica fight over the new man in the office.

The staff are anything but happy when Alan starts a protein diet as a New Year's Resolution and bans coffee and vegetables in the office. The staff secretly start a coffee house in Richard and Victor's office. Alan eventually makes a fool of himself on television, and goes into a state of shock as a result of his new diet. He allows coffee back in the office. Wanda pushes for an espresso machine, but does not get it.

Alan has a nightmare about someone smashing a pyramid with a hammer in the company boardroom. He charges Veronica with organising a team building weekend. The entire office however is completely apathetic to the idea including Alan, who five minutes after ordering her on the Team Building quest announces he can't make it. At Veronica's request Alan hires Angela Windstrom to take over a few administrative responsibilities while he focuses on the creative. Within her first day Angela appoints four new vice presidents over Richard and Victor. As the week moves on Angela appoints another ten vice presidents. The trio has to team up in order to get the new Vice Presidents to resign, and it is soon after revealed that Angela and the others are from a company that specialises in team building excersises.

Alan orders Richard and Veronica to create a new kids show, a task they really don't want. Wanda overhears them talking about the project and asks to join in. Siobahan returns from an evening party accompanied by Victor to announce she is in love, with Kyle.... Victor's driver. But he's not just a driver... he wants to be an actor too. Siobahan demands Kyle be put on Beaver Creek as a producer but Victor says its not possible. When she whines to Richard he tells her that he can't have the job because he's not family so the pair get married. With Kyle now a producer on the show morale is dropping rapidly as he fires a series of important staffers. Wanda recognises Kyle as a stripper from photos taken from her friend's birthday party. Victor convinces Kyle to give up his claim for a divorce settlement in exchange for a part on the new kids show.

The network has three words to describe the 150th episode of Beaver Creek. ""I Hate It!"" After taking a major advance to produce a special Beaver Creek the team has to scramble to come up with a new way to make the network happy, and what better way to do it, but to do it Live. They dig up an old script written by Siobahan that takes place in just one room. All hell breaks loose and everything that can go wrong... does go wrong. All the while a crazy woman (Miss Barnes) from a watchdog group is protesting the violence of The Sword Of Damacles. She bursts on to the set and tries to address the camera but is punched out by Siobahan seconds before the show gets cut off the air.

Victor is all Gung-Ho about his new Arcardia 3000 demo, which is basically Noah's Ark in space. Alan orders him to stop bothering him about it as he is too busy preparing for the DVD release of Prom Night at Horny High. Alan reflects back on his first film, as does Veronica as she realises that nothing has changed from the day she joined the company. Fritz Hoffman comes in from Germany to direct the Arcadia demo he brings with him the new European Super Model Tempesta Victor convinces Dino (Blind Jimmy) to play the hero in Arcadia. Things start to go badly when Tempesta falls for Dino and breaks up with Fritz. He falls apart and can't continue directing the demo. Things are not going well with Alan's Director's commentary for Horny High either as he begins to realise his participation on the movie was less important than he had originally thought. Fritz agrees to record the commentary for Horny High, and Alan takes over the Arcadia demo stealing all of the credit from Victor

Alan is concerned with morale at Pyramid and so he hires William and Susan Doyle to produce a video to boost morale. He instructs them not to tell Veronica, Richard or Victor what they are doing as it will only arouse their suspicions. The last time the company produced an internal video they fired most of the staff. (2x02 New Offices) Meanwhile, Alan gives Victor and Wanda a make work project to find a song he heard on the radio at some point over the last week. The only problem is he doesn't remember how it goes, what station he was listening to, or when he heard it. The three are convinced that this, and Alan's announcement that the Sword of Damacles needs to be more Australian are all designed to keep them busy so they are unprepared for their coming firing. Veronica and Richard come up with a great way to break up the team by planting ideas in each others heads.

Morale is down on the set of Beaver Creek. Siobahan wants a better story to showcase her ‘talent' and so the sacred trio of Victor, Veronica, and Richard come up with a story about a near death experience to help her. Before they can deliver the good news however she walks in on her father and mother who after having one of their famous fights begin making out. Siobahan freaks out and becomes even harder to work with on set, choosing to spend most of her time eating at the craft table. Meanwhile, to get back at his Ex-Wife Alan hires Adam Kalilieh, an art director to produce any film he wants, for however much money he wants. The movie goes way over budget, putting the entire company at risk and Richard convinces Alan to sell the film to his ex-wife's company in order to save theirs. Meanwhile, Veronica convinces Siobahan to quit Beaver Creek and move to LA with her mother, saving Beaver Creek $30,000 and episode.

Alan decides to kill off the entire cast of Beaver Creek in the final episode, leading everybody on the Pyramid staff to imagine their own eventual deaths. Richard gets hired out to the mayor's office to produce a campaign ad.

Richard's latest pilot is a disaster. Victor lords it over him as they enter a meeting with Alan. Alan decides to bring in a creative team known as ""The Two Daves"" When they arrive however, they're on Dave short. Dave has a great deal of difficulty coming up with any good ideas on his own. Richard helps him out saying he has an annonymous writer with some ideas. The writer wants 50% of Dave's consulting fee ($50,000). Dave finally agrees. The writer of course, is Richard. Victor wants a date with Veronica's friend but she thinks he's gay. He then finds out Veronica's Gym (female only)is only four blocks away. Alan and him sue for membership. Hours later they find out there is a better gym even closer, the only catch, is that its a gay Gym.

Eliza, who is Network Brian's daughter, is at the office on a school work study. Alan gets asked by Network Brian to keep Richard and Victor away from her, and he tells the to go away, but not too far. Victor takes Richard to an empty soundstage where they brianstorm about a sci-fi history movie. Meanwhile, Eliza pitches show ideas that are all old shows with minor, and not workable, differances and falls in love with Veronica, and Veronica rejects her. Richard and Victor end up taking a drunken and depressed Eliza home, to find Alan and Network Brian in the apartment.

In an attempt to be sure the reality show ""Roomies"" dosen't get canceled, Alan makes sweeping changes, including the eventual firing of the actual 'roomies' in favor of Veronica, Victor, and Alan himself. Of course the network cancels the show.

Veronica complains to Alan about the feeling of a posionous work envrionment, as well as how babyish the Beaver Creek actors have been lately. Wanda suggests Veronica get child care books to help her deal with the actors, which sparks the rumour that Veronica is pregnant. Victor can't let go of getting a ""password"" for when he, Alan, and Richard talk about Veronica's ""situation"". Alan decides to make Veronica quit, so he doesn't have to pay her matromony. To do this, he decides to start a fake company to hire her away. Belinda has a brief conversation with Richard and Victor, where she's told not to make any press releases. The guys then decide to put Belinda in Veronica's place when she goes on leave, so they can be in control. Belinda sends out a press release, and before Alan can fire her, she first announces that she's pregnant, and then states she's going to try to get a job with the fictious company the guys were trying to get Veronica to join.