One skit involved a faux news report in which people hunt Muppets. The "Annual Muppet Hunt" takes place in Henson, California, where the townspeople attack puppets that have washed up on a beach, much to the chagrin of the protesters. The puppets are later sold to stores on Rodeo Drive where they're made into fur coats.
Commercially licensed puppets, based on Henson characters, were used in the skit. Among them were Kermit, Miss Piggy, Fozzie, Scooter, Rowlf, Animal, Big Bird, and Cookie Monster. Bert and Ernie are mentioned, but not shown.