Which animation studio faced significant challenges in the 1940s and was released from their Paramount contract?

Fleischer Studios experienced considerable difficulties during the 1940s, particularly due to financial struggles and management challenges. Founded by the Fleischer brothers, the studio initially enjoyed success with characters like Popeye and Betty Boop. However, as World War II progressed, they faced increased competition, notably from Disney and Warner Bros., and were unable to adapt as effectively to the changing market dynamics.

In 1941, Fleischer Studios was released from its contract with Paramount Pictures, which impacted its production capabilities and distribution strategy. This separation intensified the financial instability of the studio and made it more difficult for them to produce content, leading to a decline in their output and quality. The combination of these factors ultimately led to the studio's decline and eventual closure in the 1950s.

This context highlights the significant impact that external pressures, such as economic factors and contractual relationships, had on the studio's ability to thrive during a challenging period in animation history.