Facing significant debt, Corus Entertainment Inc. has halted new productions at its legendary animation studio, Nelvana Ltd., casting uncertainty over the future of a company that helped establish Canada as a global animation powerhouse for over 50 years.
In a statement, Corus clarified that Nelvana is not shutting down entirely. Instead, the company is pausing new productions “for the time being” as it winds down existing projects. The Nelvana brand will now focus on distribution, merchandising, and managing its extensive library of existing properties. Corus declined to confirm how many jobs have been affected by the production halt over the past several months.
Founded in 1971, Nelvana became a giant of Canadian animation, popularizing a business model based on developing content from successful intellectual property. The studio rose to prominence in the 1980s with The Care Bears Movie and became an industry powerhouse by producing or co-producing beloved shows like Franklin, Babar, and The Magic School Bus. More recent work includes Barney’s World and the live-action Hardy Boys series.
The decision stems from severe financial pressure on Corus, which acquired Nelvana in 2000 for $540 million. The media company reported over $1 billion in long-term debt in June and warned of “significant cost-cutting actions.” Its advertising revenue has fallen 15% year-over-year, while revenue from production and distribution dropped 5%. In a note to investors, Bank of Montreal analyst Tim Casey described the company’s revenue outlook as “very precarious.”
Lenders recently extended the maturity date on a $330-million credit agreement to March 2027, giving Corus more time to meet its obligations. However, the company’s stock was trading at nine cents a share on the Toronto Stock Exchange as of Tuesday’s close. In its 2024 fiscal year, Corus paid $1.8 million in bonuses to five top executives for hitting cash flow targets, despite the company’s shares falling 90% during that period.
Nelvana’s production pause occurs amid wider turmoil in the animation sector, which has struggled with inflation, rising interest rates, and the effects of the 2023 Hollywood strikes. The Canadian children’s programming industry faced another blow last week when WildBrain Ltd. announced it would shutter four channels, including the Family Channel, after Rogers and Bell dropped them from their distribution networks.
