Cineworld Group PLC (LON:CINE) shares sank on Friday following news that entertainment giant Walt Disney Co (NYSE:DIS) has postponed the release of three of its major films amid rising coronavirus cases in the US.
Disney has pushed new Avatar and Star Wars films back to December 2022 and 2023 respectively, while a live action remake of Mulan has been removed from the schedules entirely.
The decision to delay Mulan may also be attributed to ongoing diplomatic tensions between China and the US, as well as controversy over statements of lead actress Liu Yifei concerning recent protests in Hong Kong.
Other film studios including Warner Bros have also pushed back film releases as lockdown measures earlier in the year forced the closure of cinemas across the world.
However, the Disney delays will be a fresh blow to the sector, which has been struggling to recuperate as lockdown measures are relaxed in certain countries.
Hopes for a late summer rebound, particularly in the US, appear to have been dashed by the second wave of infections in the country that has led many states to reimpose lockdown measures to contain new outbreaks.
On Thursday, Cineworld and peer AMC Entertainment Holdings Inc (NYSE:AMC) said they will delay the reopening of their US cinemas to mid-August from July 31, although the former is planning to reopen its UK branches next week with reduced capacity. Cineworld acquired US chain Regal in 2018 to create the world's second-largest cinemas group,
Shares in Cineworld fell 12% to 46.7p in mid-afternoon trading in London, while shares in Disney were 2.3% lower at US$115 in pre-market trading in New York.