In Death to Smoochy, Randolph “Rainbow Randolph” Smiley hosts The Rainbow Randolph Show. It’s a popular children’s TV show on the kids TV channel Kidnet. While his Rainbow character is happy and friendly onstage, off-stage, Randolph is a corrupt alcoholic; accepting bribes from parents to put their kids on his show.
When a FBI investigation exposes Randolph’s shady business dealings, Kidnet promptly cancels his show and fires him. Sheldon Mopes and his character, Smoochy the Rhino, replaces him. Sheldon is overly sincere, and only wants to provide quality entertainment for children. His producer, Nora Wells, has many doubts that his show will succeed, but it quickly becomes very popular anyway.
Meanwhile, Randolph goes to Marion Stokes, and pleads for his job back, but there’s nothing Marion can do. Randolph tries many times to have Sheldon fired, but he doesn’t have any luck. With nowhere to go, he tries his former partner, Angelo Pike, and asks him if he can stay at his apartment. Angelo says yes.
Back at the new show, Nora increasingly takes creative control of Sheldon’s show. So, with the help of a corrupt new agent, Burke Bennett, Sheldon renegotiates his contract where he is named executive producer.
Soon an Irish mob boss named Tommy Cotter very politely asks Sheldon to create a spot on his show for her cousin Spinner Dunn. Spinner is a bran damaged ex-boxer with a heart of gold, and she makes Sheldon an offer he can’t refuse. Sheldon decides to make him Smoochy’s cousin Moochy.
When Sheldon learns that Burke signed him up to star in a Smoochy ice show, he fears it will exploit children. Burke and Merv Green, who heads the corrupt charity for the ice show, also make Sheldon an offer he can’t refuse, but he backs out anyway.
Next Randolph disguises himself, and tricks Smoochy into heading the show at a Neo-Nazi rally. Looking like a racist now, Kidnet promptly cancels his show and fires him. Nora even refuses to acknowledge him.
Randolph goes to Nora’s apartment to get his old show back, but instead he smugly reveals that he set Sheldon up at the event. Tommy and her mob boys force their way into Angelo’s apartment, and make Randolph to confess that he tricked Sheldon.
The network returns Sheldon and his show to the air, and Randolph becomes the most hated man in America according to the media. Angelo now fed up with Randolph’s antics, kicks Randolph out of his house too. Once Sheldon’s show is back on the air, he has celebratory sex with Nora.
Sheldon eventually agrees to do an ice show, but without the corrupt charities from before. To get even, Burke and Green decide to kill Sheldon. They then hire a new host who will cooperate with their profit skimming plans.
Unfortunately for them, their plan backfires during rehearsal, when Green’s men mistake Spinner in his Moochy costume for Sheldon, and they murder him. Tommy isn’t happy. When she finds out she has her boys kill Merv and his men.
Randolph, now really desperate, confronts Sheldon and Nora at their apartment. He lets it be known that Nora has affairs all the children’s show hosts, including Randolph himself. This breaks Sheldon’s heart, but Nora insists she really loves him. After the two calm Randolph down, they discover he is depressed and honestly misses entertaining children. Sheldon decides to let Randolph stay in his apartment until he recovers.
Burke and Marion next partner up. Burke hires Buggy Ding Dong, another ex-child show host, to assassinate Sheldon during his ice show. Buggy gets backstage, but before he shoots Sheldon, Randolph appears and confronts him.
The two fight for Buggy’s rifle until he falls to his death in the ice rink. Once Sheldon realizes that Burke and Marion set him up, he pulls a gun and threatens to shoot Burke. However, Tommy and her boys arrive, and they persuade him not to give up his high standards. Instead, Tommy takes care of Burke and Marion her own way. Sheldon and Nora kiss in Times Square, and Smoochy and Randolph soon launch a new show together for a kid friendly ending.