At the start of the film, Rugby knows so little about Christmas that he thinks it's a one-time event and is surprised to learn that it's happening again. Yet in the songs he sings, he says "no Christmas tree ever felt so tall." This implies a knowledge of multiple Christmases. What?
I think the song is just to illustrate his ego. There's a lot of hyperbole in that second account of his unboxing, after all (Rugby describes brass bands, trumpets, spotlights, and banners which almost certainly weren't there). He's aware at this point that Christmas is an annual event, but he still thinks it's all to celebrate him.
HOW THE FRACK DID THE HUB GET THE RIGHTS TO THIS?
The film is still owned by the Henson Company, as is Fraggle Rock. Being the Hub showed Fraggle Rock, this was probably part of the deal.