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    Under planned fantasy sports merger, DraftKings would take the lead

    Boston’s DraftKings wants to merge with its former sports fantasy rival, New York-based FanDuel.
    Mark Lennihan/Associated Press
    Boston’s DraftKings wants to merge with its former sports fantasy rival, New York-based FanDuel.

    DraftKings Inc. planned to begin moving users of rival FanDuel Inc. onto its platform even as the two brands held onto their separate identities until at least next year, according to internal documents detailing terms of the proposed merger between the two daily fantasy sports businesses.

    The documents, from a presentation that Boston-based DraftKings made to employees before US regulators moved this week to halt the deal, laid out the basics of a system that it said both companies had agreed to as of May 15.

    The information obtained by The Boston Globe also provides a look into the decision-making that went on over a merger that is now on hold pending an antitrust lawsuit announced Monday by the Federal Trade Commission.

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    Though FanDuel games would have been moved to the DraftKings application and website, the document says the companies would keep both brands operating at least until after the upcoming National Football League season.

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    The goal of the transition, the document said, would be to “harness the power, cache, and loyalty from both brands.”

    The two companies declined to comment Friday on what a merger operation might look like, should they to prevail in court over the FTC.

    Once bitter rivals, DraftKings and FanDuel — based in New York — opted for a marriage of convenience as they fought together to win regulatory acceptance for an industry that has grown dramatically in a just few years and is dominated by the two firms.

    If the deal falls apart or courts agree with the FTC’s contention that the merger would create a monopoly, the companies might again have to face off against each other — as they did during an expensive advertising battle in 2015. The FTC, in moving to block the merger, warned that the two companies would control 90 percent of the paid daily fantasy sports business.

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    Fueled by seemingly ubiquitous ads, DraftKings grew from its 2012 founding into a fierce competitor against FanDuel and last year overtook its older rival as the biggest player in the approximately $3 billion field.

    Industry observers said Friday they were not surprised to find out the companies had sought a way to combine their platforms. But they cautioned that the decision to do so under the DraftKings umbrella did not speak directly to the companies’ relative strengths as standalone entities.

    Chris Grove, an industry analyst, noted that online poker companies often operate many brands under a single platform.

    “Ultimately, they were going to have to make a choice on the platform,” he said. “It would be redundant and destroy some of the cost advantages of the merger to keep running and keep iterating the platforms side by side.”

    Curt Woodward of the Globe staff contributed to this report. Andy Rosen can be reached at andrew.rosen@globe.com. Follow him on Twitter at @andyrosen.