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Funny Lady, the follow-up to the 1968 Funny Girl which made a movie star of Barbra Streisand, picks up the character of Fanny Brice in the 1930s. Although she is a tremendously famous Broadway star, she has suffered from the stock market crash and needs to boost her finances.
Even Ziegfeld, who soon will pass away, is having a hard time raising money for a show. Into this scene bursts brash young Billy Rose (James Caan), an egotistical lyricist with unrestrained ambition. He cajoles and charms Fanny into linking up with him, convincing him that he can produce a revue that will showcase her to their mutual advantage.
Out of town, the show is an unmitigated disaster, and Fanny uses her professional know-how to whip the show into shape. It arrives in New York a hit -- and Fanny and Billy arrive an item. Both of their careers blossom, but even though they marry, their relationship suffers.
Fanny still carries a torch for first husband Nick (Omar Sharif), and Billy, partially because of insecurities caused by Fanny's feelings for Nick, has a roving eye. In California working on a lucrative radio show, Fanny and Nick connect again -- and Fanny realizes that she is finally over him.
Thrilled, she flies to Cleveland, where Billy is working on a new show, ready to commit herself totally to him -- only to find him in bed with another woman. The two part, but years later they meet again to discuss a new show, and it's clear that the chemistry between them is still there.