Scottish football faces a "slow, lingering death" if newco Rangers start life in the Irn-Bru Third Division, SFA chief executive Stewart Regan claims.
In the immediate aftermath of Scottish Premier League clubs rejecting Charles Green's application for top-flight entry, Regan also made a stark claim that depriving Rangers fans of their team would spark "social unrest".
Regan made it clear the SFA could not allow the Ibrox club to start at the bottom, meaning Scottish Football League clubs face the prospect of an SPL2 breakaway if they reject a plan to put them in the First Division.
Regan said: "The only solution for the game now is that Rangers come into the Scottish Football League and they come into it in the First Division.
"If Rangers were to go anywhere other than the First Division, then there would something in the region of £15.7million worth of losses to the game.
"For the bigger clubs at the top of the league, that's half their annual distributions. For clubs at the bottom it is basically wiping out their entire distributions, for some of the smaller clubs it's a huge proportion of their annual turnover.
"Even if Rangers end up in the First Division, there is still going to be a £5million loss of income to the SPL clubs.
"The game is not sustainable so there would be a slow lingering death for the game in Scotland.
"It would then trickle down to the SFL. From our perspective as the governing body, we cannot allow that to happen."
The SFA chief executive also confirmed a real threat to television contracts.
"We have had dialogue with the broadcasters and we understand what the various stakeholders from Sky television, ESPN, Sport Five and a number of the SPL's other commercial partners are likely to do in the event Rangers are not in either of the top two tiers," he said. "It's not pretty.
"That's why we cannot sit back and let that happen without trying to get all parties to accept this is the only solution which can keep the game afloat.
"Without Old Firm games, the value drops, the overseas deals are almost exclusively about the Old Firm derby and that would go immediately.
"It is fair to say the broadcasters would live with a year without Rangers in the SPL, because it could be a fantastic story for them, which is why I think First Division rights will be an interest as people will want to see how this club is going to bounce back."
Sevco Scotland's application to assume Rangers' membership of the SFA is also outstanding and it is believed not all relevant information was received in the company's application pack on Friday. Rangers faced possible suspension and termination of membership if they did not accept a transfer embargo but Regan believes there would be dire consequences if there was no football at Ibrox.
"Without Rangers, there is social unrest and a big problem for Scottish society," the Englishman said. "There are thousands of Rangers fans whose fathers and parents and grandfathers have been Rangers fans. You can't contemplate a situation without that and if Rangers weren't to exist that could have real dire consequences."
But the SFA will not allow the new Rangers to start with a clean slate.
"The membership cannot be transferred on financial grounds alone," he said. "It has to have a degree of sporting integrity and that means sporting sanctions."