In 1985, Shawn is caught by his dad reading comic books. Henry explains why they are not allowed in the house, and reaffirms to Shawn that good old fashion police work is always the best, and that superheroes - aren't.
Interim Chief Vick and Detective Lassiter are out of town on their way to a seminar on non-lethal weaponry, which leaves only Juliet to deal with a mother who comes to the station claiming her son, Malone Breyfogle, is missing. However, since her son is 18, the police can't get involved for 48 hours. Juliet believes something has happened to him, and so she enlists Shawn's help to investigate immediately. Shawn and Gus head to the Breyfogle house, where they discover a pile of cash stashed in Malone's room and clues to his last known whereabouts - the TriCon, the tri-annual comic book and science fiction convention which is being held in Santa Barbara at the moment.
Tickets to the TriCon have been sold out for months, so Shawn and Gus talk their way inside by convincing the administrator that they are assistants to this year's featured guest, George Takei. While there, they meet two executives from Parastone Pictures, who tell them they are premiering footage from their new film "The Red Phantom." Gus tells Shawn he already knows the movie will bomb because it has been panned on a popular internet website that reviews movies based on comic books. It's unfortunate because the last movie Parastone made, "The Adventures of the Green Spirit," was so bad, it nearly killed the Green Spirit character altogether.
Shawn and Gus soon discover how Malone got all his cash. He is, in fact, the mind behind the website. Parastone paid for him to give a good review to "The Red Phantom." Clearly, he went back on his word, which makes the Parastone executives prime suspects in his disappearance. However, the investigation soon takes a turn when those executives go missing as well. This has now become a full-fledged police investigation.
Meanwhile, Chief Vick's water breaks on the way to the conference and Lassiter must rush her to the hospital and stand-in as her birthing coach.
Back at the convention, in between assistant duties for Mr. Takei, Gus tells Shawn that the bad reviews for "The Red Phantom" which appeared on Malone's website, were posted after he was kidnapped. So the kidnapper must be the one slamming the flick online.
Gus also realizes that the case is eerily similar to a Green Spirit comic, and according to the story, they don't have a lot of time to save the victims before they are killed. Gus thinks the kidnapper must be some kind of deranged fan of the Green Spirit, but Shawn says it's not a fan, it's the comic's creator, Hiltz Kooler. Kooler has a vendetta against anyone involved in the tanking of the Green Spirit movie and the near decimation of the character, and when he found out all the people who had wronged him would be in the same place at the same time - the convention - the opportunity to exact revenge was too good to pass up.
The police arrest Kooler and save the victims, Shawn and Gus are heroes, and George Takei storms off, upset his assistants have upstaged him.
In the end, Shawn, Gus, Lassiter and Juliet congregate at the hospital to congratulate Vick on the birth of her daughter.
- The title deliberately apes the style of many classic comic book storylines involving the confrontation of hero and nemesis. 'The Green Spirit' bears a certain resemblance to several comic characters, not least DC's The Spectre and perhaps Green Lantern, the latter of which, sadly, had a similarly difficult transition to the big-screen in 2011. Likewise, the similarity of 'Spirit' and 'Phantom', combined with the 'stop/go' implications of red and green, is presumably deliberate.
- Pineapples appear when Shawn and Gus are buying churros, and discussing the missing blogger, a woman in a blue shirt walks behind them with what looks like pineapples all over her grocery bag. Also, what looks like pineapple leaves are sticking out of the top.
- The mention of the large nipples on the Green Spirit costume in its movie is most likely a reference to the oft-ridiculed costumes of the Batman and Robin movie starring George Clooney.
- Many of the character names in this episode come from Batman - Leslie (after Dr. Leslie Thompson), Malone Breyfogle (after Matches Malone, a character, and Norm Breyfogle, an illustrator), Talia (after Talia al Ghul), and Dent (after Harvey Dent).
The gallery for Shawn vs. the Red Phantom can be found here.