The movie opens with the information that during the 1960s, even though British rock was at its peak, British radio refused to play rock music. This led to the creation of pirate radio stations, which kept their ships anchored off the coast and played rock music 24/7.
A boat approaches the Pirate Radio ship and drops off Young Carl (Tom Sturridge), a young man who has been expelled from school for smoking marijuana. He has been sent to spend time with his godfather Quentin (Bill Nighy), who owns the ship, allegedly to straighten him out. Quentin introduces Carl to the rest of the crew: The Count (Philip Seymour Hoffman), an American DJ who is the star of the station; Simon, a slightly awkward guy who dreams of finding romance; John, who does news and weather; Dave, who is extremely popular with the ladies; Angus, whom no one really likes but who runs a "crazy" comedy show; and Felicity, a lesbian who cooks for the boys. Carl is to room with Thick Kevin, who is unbelievably stupid.
Carl's first night on the boat is a raucous party and we see scenes of the DJs running their shows spliced with the British people who listen to them. Millions of Britons are tuning in to Pirate Radio, and this greatly disturbs Sir Alistair Dormandy (Kenneth Branagh), who is put in charge of eliminating the problem of Pirate Radio. With the help of his new assistant, Twatt (Jack Davenport), they begin working to put Pirate Radio out of business.
Twatt's first plan is to eliminate funding for Pirate Radio by making it illegal for British companies to advertise with them. Quentin breaks this news to the crew, explaining that in order to try to recoup their losses, he will be bringing in the famous DJ Gavin (Rhys Ifans). This disappoints the Count, who is used to being #1 on the station and is jealous of Gavin.
During Carl's time on the boat he meets Mark, the late night DJ who never speaks and is referred to as "the sexiest man in the world." While they are sitting on deck, they begin discussing their conjugal visits: since they never go ashore, and the only woman on board is Felicity, the men each bring out a woman every other weekend. Dave decides that he is going to help Carl lose his virginity by bringing a girl to his room, turning out the lights, and sending Carl in his place. Despite his reservations, Carl goes along with the plan, only to have the girl turn on the light and see him before he even makes it to the bed.
Gavin's arrival has brought in international advertising to the station. Dormandy and Twatt are disappointed by the failure of their plan, and set out to find another way to shut down the station. Dormandy gives Twatt a deadline to figure something out, and Twatt leaves determined to find a loophole that will work.
Carl's birthday approaches and Quentin invites his niece, Marianne (Talulah Riley), to spend the evening with him. Before he goes to dinner, Carl runs to Dave's room and asks for a condom, which Dave provides. After a successful dinner, Dave stops in and comments, "I see why you wanted that condom!" When Marianne confronts him about this, Carl apologizes, saying he was stupid, and throwing the condom out the window to show good faith. After this display, Marianne kisses him and says, "I think we might need that condom," at which point Carl runs back to Dave to ask for another. Dave is out, but suggests he ask Gavin. Gavin provides him with a condom and some inane advice about being gentle, but forceful, and Carl heads back down to his bunk. Marianne is gone, but he hears a noise from Dave's room, and opens the door to see Marianne in bed with Dave. He leaves, depressed.
At breakfast the next morning, an older hippie guy sits down at the breakfast table. The crew looks at him cluelessly, and the Count asks who he is. The man introduces himself as Bob, who does the early morning show. He has been on the ship for two years. They all kind of nod, and when he leaves, one man says, "So that's Bob!"
Twatt approaches Dormandy, excited to announce that he has discovered a way to shut Pirate Radio down for good. The radio signals have jammed distress signals from boats, leading to the sinking of one British boat and the deaths of some sailors. They begin to draft a bill to outlaw Pirate Radio in the name of maritime safety.
While in his bunk one day, Carl and Kevin are talking and Kevin says he believes that Carl is on the boat not because his mother wants him to straighten up, but because it's time for him to meet his father. Kevin suggests that Quentin is father, and comments "Sometimes I think they should call me Clever Kevin," before falling out of his bunk.
Simon, who has become good friends with Carl, is thrilled to announce he is getting married. His new wife, Elenore (January Jones), arrives on the boat and the ceremony is broadcast on the radio. Their first night together is unsuccessful, and the next morning Elenore explains her real reason for marrying him: she and Gavin fell in love, but he wouldn't marry her, and the only way she could get on the boat was if she married a DJ. She only married Simon to get to Gavin, and announces that she'll be moving in with him. Simon is heartbroken and has the marriage annulled. When the crew confronts Gavin, Simon asks if he slept with her before she left, and Gavin admits that he did. The Count decides to take it outside.
The Count challenges Gavin to a game of chicken: whoever climbs the furthest up the boat's mast is the winner. Both men reach the top, and Gavin dives from the high point into the water, which forces the Count to do the same or be seen as weak. The next scene is the two men who are severely injured (Count's arm, Gavin's leg, from the fall), speaking on the radio about having settled their differences. Gavin also apologizes to Simon on air.
Carl's mother, Charlotte (Emma Thompson), comes to visit for Christmas. On his way to meet her, Carl runs into Bob in the hallway, and says, "Tell your mom that Muddy Waters rocks. She'll know what I mean." Carl spends some time with his mother, who gets along with the rest of the crew, and asks her if Quentin is his father. She laughs and says no. On her way off the boat, Carl delivers Bob's message, to which Charlotte replies, "Oh God, he didn't tell you, did he?" Carl realizes that Bob is his father, but Charlotte leaves the boat before they can discuss it. The next night he goes in during Bob's radio show and says, "I think you're my dad." They never get beyond that because News John arrives and they cannot discuss it openly.
The British public is largely against the Maritime Safety bill proposed by Twatt and Dormandy, but they resolve to push it through anyway. They know that Parliament will accept the bill and eliminate the problem.
A boat arrives at the Pirate Radio ship carrying Marianne and a friend, Margaret. Margaret is a lesbian, much to the delight of Felicity, who has been alone for some time. Carl and Marianne reconcile and Carl loses his virginity. When he steps outside of the room, the whole crew is waiting for him to hear the details of his first time. They all cheer, as do people across Britain, and Margaret and Felicity peek their heads out of the room down the hall at the noise, which draws more cheering.
The Maritime Safety bill passes and Pirate Radio is to be shut down at the new year. Dormandy is thrilled with the result.
The crew learns of the shutdown of their station and is disheartened, but resolve to keep going with the station--eventually all agreeing to damn the law and play the music. At midnight on New Year's, Dormandy, his family, and Twatt are listening to the end of Pirate Radio. They go silent at midnight, to toasts from Dormandy and Twatt, but a minute later come back full swing. Enraged, Dormandy sends Twatt and several boats out to arrest the men.
When Twatt and the naval officers arrive at the place where Pirate Radio docks, they find a fishing boat instead. Pirate Radio is on the move. Unfortunately, as they're moving, their engine explodes, which will cause the ship to sink. During the sinking, they continue to broadcast, asking for help and giving their coordinates between songs. Twatt phones Dormandy to ask if they should help, and Dormandy says no.
Carl runs down into the sinking ship to find Bob, and manages to pull him to safety but forcing him to leave his record collection. While on the deck of the sinking ship, the men talk with each other and wait for the inevitable. The Count stays below to broadcast until the last possible minute. As the ship nears sinking, Simon spots hundreds of boats heading their way: Pirate Radio listeners who heard their coordinates and are there to rescue them. All of them get on boats--including Simon, who finds his #1 fan and kisses her, and the Count, who emerges at the last minute--and head back to England.
A postscript notes that there are now many radio stations that play all kinds of music, all of the time.
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