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Mary learns it’s Lou’s birthday and decides to surprise him with a party. What she doesn’t learn until too late is that Lou hates birthdays and surprise parties.

The circus is in town, and Ted’s wish has finally come true. He is invited to reign as Grand Marshal for the circus parade. But Lou decides the anchorman’s ambition is not in keeping with a newsperson’s image and refuses to let him participate. Ted is humiliated by Lou’s decision, as well as being replaced by Chuckles the Clown – although his feelings change abruptly when something funny, though fatal, happens to the substitute Grand Marshal. The WJM team can’t stop laughing over Chuckles’ demise, and Mary castigates them all for their lack of respect. But Mary finally starts to see the funny side… at the most inappropriate moment possible.

Mrs. Morgenstern, Rhoda’s mother, pays another visit to Minneapolis, and this time, brings her husband along. After a few days, Mrs. Morgenstern tells Rhoda and Mary that her marriage is on the rocks. Convinced that her husband is seeing another woman, Mrs. Morgenstern moves in with Rhoda and Mary. The girls, however, are certain it’s all a misunderstanding and are determined to get the couple back together again.

Mary starts to have doubts about WJM’s relatively small-time operations when she begins dating the anchorman from Minneapolis’s top-rated station and finds herself doubling as a spy.

The annual Teddy Awards has the newsroom bubbling over with anticipation, except for a distraught Murray who has never won an award and is sure this year is not going to prove any different. Mary Richards’ added chore has not lessened the commotion around WJM-TV. She’s in charge of entertainment for the Awards show, and just as Lou expected, the newsroom turns into a vaudeville stage.

Who would believe that Ted and Mary are having an affair? Maybe no one, but that doesn’t stop Ted from spreading rumors around the newsroom.

It looks like Mary’s friendship with Rhoda is going down the drain after Rhoda makes what Mary thinks is an unkind remark.

Dotty and her recently retired husband, Dr. Walt Richards, move to a home in town to be near their only daughter. Mary is delighted to see her parents, but when they find a place to live right around the corner, and start planning her evenings and weekends, Mary calls on Rhoda for advice on how to turn off over-solicitous parents.