Henson loved the theater and considered doing a Broadway show that featured the Muppets. In 1971 he had developed several pieces that were performed live in a Las Vegas show hosted by Nancy Sinatra. He also toured with Jimmy Dean, which gave him a taste for live performance.

The following year, Henson made a formal proposal to a group of theatrical producers to create a live revue to be performed at New York's Lincoln Center. Made of brightly colored cutout collage and marker drawings, this proposal had a more polished look than some of his earlier proposals. It contained images of earlier ideas, including Sclrap Flyapp and Big Boss Man, as well as concepts for new pieces, including The Clodhoppers, which were full-bodied, rod-operated puppets, and Gawky Bird, a colossal fifteen-foot rod puppet...

The Muppets never made it to Broadway, but Jim always kept this idea in the back of his mind. As Jerry Juhl recalled, "Every couple of years, when Jim would take a week off, he would come in and say, "We gotta do that Broadway show".

Even today, the idea for a live show comes up for discussion in company production meetings.