The newly hired news director arrives in time to find the investigative news team tracking down the biggest society scandal to break in years.
Alex accepts that his marriage is over as Nancy tries to create order in his young son Sean's life; the News Brothers start a side business involving videotape, buxom women, and automatic weapons; Marvin discovers the origin of the chopped liver bomb; and Lou grapples with a professional athlete's wish to reveal his homosexuality during a Re-Action News Broadcast.
The News Brothers continue their side video business, which leads to the arrest of virtually every man at Re-Action News; new GM Helen Forbes makes her presence at the station known; Alex begins to get settled in his new house, thanks to the beautiful and ever-efficient nanny Aase; Ricardo heads home to Miami after receiving tragic news; and the killer of society woman Lisa Prentice may be about to reveal himself to Liz.
A man holding an abortion clinic hostage will only deal with his ""ideological mentor,"" Marvin; Helen hires image consultant Brian Clayhill, who is bent on cutting the news staff fat and updating L.A. 3's on-air look, prompting one veteran newsman to resign before the axe falls; Ricardo attempts to comfort his mother while dealing with his own grief over his brother's murder; Harry gets ""ad-libs"" from Billy, the stand-up comic; and Helen begins a heated pursuit of Marvin.
It's contract renewal time for Harry, who lists among his demands a 10% across-the-board increase and ownership of the ""Beacon of Truth"" name. While General Manager Helen finds both Harry and his demands laughable, she starts to take both a little more seriously when it appears as if Channel 8 is courting The Beacon—a scenario that delights both Sherry and Ricardo.
Station General Manager Helen Forbes sets her sights on bedding commentator Marvin Seaborn, but her research into his past commentaries suggests that having her way with him may be trickier than she thought. Meanwhile, Eddie comes up with the perfect location from which to cover a major downtown fire—the roof of a competing station—and Brian the consultant is still looking for ways to ""cut the fat"" at KXZX.
The Re-Action News team is called into emergency service when a earthquake hits Los Angeles, pulling Liz, Ricardo, Joe and Peggy from cocktails at Aloha Louie's; preventing Sherry from returning to Harry's bed, where she had left him handcuffed in his underwear; and forcing Tommy and Eddie into a confrontation over Eddie's intentions in regards to Tommy's estranged wife.
When Peggy crashes her car, the result of a brake job paid for but never performed, Alex sends Nancy and Sean undercover to prove that Uncle Sam's car repair is a crooked operation. Unfortunately, it's also the station's biggest client. Meanwhile, the image consultant, Brian, begins his cosmetic overhaul of the news and Eddie and Tommy try to cope with Eddie's live-in relationship with Tommy's wife.
When the overnight recovery of a Hispanic shooting victim is attributed to a shadow resembling the Virgin Mary suddenly appearing on a local garage door, a reluctant Liz is assigned to cover the story, which itself prompts many in the newsroon—especially a troubled Sherry—to examine their religious beliefs. Meanwhile, Nancy and Eddie set off to do a story in war-torn Nicaragus, accompanied by a severly out-of-place Ricardo.
After escaping their captors in the Nicaraguan jungle, Ricardo, Eddie and nancy make it to the orphanage, where they find ransacked buildings and four terrified kids. Meanwhile, Marvin finally succumbs to Helen and, after a long hiatus from the street beat, Harry tries his hand at reporting.
Considering Tommy has moved onto Eddie's houseboat and Eddie has moved in with Tommy's wife, the news brothers decide it may be time to break up the team. But when they're forced to work together one last time, their mutal anger turns physical; Feeling sexually used after the break-up of heir ""relationship,"" Marvin tricks Helen into a confession; Rick gets his chance to produce when the station takes on a live rock 'n' roll special at the last minute; and while Sean visits his mother with hopes of getting his parents back together, Alex and Nancy—after weeks of trying not to—finally get closer.
When a gay radical group called Odd Man Out plans a press conference at which they claim they will name a closeted gay in local broadcast journalism, Re-Action News sportscaster Lou Waller fears he will be publicly ""outed."" Meanwhile, speculation as to who will be names consumes the news team, whose members alternately debate appropriate coverage of the event, explore their own feelings about homosexuality—and, in the case of veteran anchor Harry, attempt to enlist eyewitnesses (primarily co-anchor Sherry) to attest to their heterosexuality. Meanwhile, recently separated sound man Tommy is adrift—literally and emotionally—after his wife, who had also been involved with his partner and best friend, vanishes with their baby' news director Alex and news producer Nancy try to figure out where to go with their relationship ""the morning after,"" which also marks the arrival in L.A. of Alex's estranged wife; and formerly celibate commentator Marvin holds a news conference to announce his sexua