FuboTV stock was skyrocketing on Monday after the company and Walt Disney agreed to merge their live TV offerings in a deal that could shake up the sports streaming landscape.

Disney is combining its Hulu + Live TV business with Fubo to form a new streaming platform, the two companies said in a joint press release Monday. Disney will own 70% of the new venture, which will operate under the Fubo name and be run by Fubo CEO David Gandler.

Fubo also is dropping its litigation against Venu Sports -- a rival streaming service planned by Fox, Warner Bros. Discovery, and Disney's ESPN -- in exchange for a $220 million cash payment. Fox and News Corp, the parent company of Barron's publisher Dow Jones, share common ownership.

Fubo stock closed up 251% to $5.06 on Monday. It closed at $1.44 on Friday and is up 73% over the past year. Disney fell 0.1%, Fox rose 0.75%, and Warner Bros. Discovery added 2.5%.

The deal will create a new sports streaming platform with more than 6.2 million subscribers, who will be able to watch live events already carried by Fubo as well as Disney-owned channels like ABC and ESPN.

But it also clears the runway for Venu Sports. In August, a judge granted Fubo a preliminary injunction, saying that the new service would "substantially lessen competition and restrain trade."

Fubo's dropping of its case against Venu could significantly impact the entertainment sector, Brian Weiser, an analyst who runs the newsletter Madison & Wall, said Monday. The new sports streaming service could drive up cord-cutting rates and reduce the amount of live TV available on traditional distribution platforms, he wrote.