Scottish FA chief executive Gordon Smith insists that making Scotland matches free-to-air would be damaging.
A department of culture, media and sport review has recommended that home and away football qualifiers for the home nations should be listed.
"If the revenue stream is not there then it's going to have a disastrous effect on the game," said Smith.
He also hinted that he would like to see the SFA compensated if any future deal resulted in a financial shortfall.
The government's recommendations for revised "listed events" that are made available to watch for free on terrestrial television was published on Friday.
The panel was headed by former FA executive director David Davies and England's home Ashes Tests will return to free-to-air television from 2016 if the suggestions are adopted.
Wimbledon tennis, golf's Open and Welsh Six Nations matches in Wales fall into the same category.
However, the Winter Olympics, flat racing's showpiece, the Epsom Derby, and rugby league's Challenge Cup final have been removed.
If the BBC or STV make a similar offer to the money that's paid by satellite broadcasters then there's not a problem
SFA chief executive Gordon Smith
The addition of away football qualifiers has come as a surprise and will cause further dismay for the Scottish FA.
Smith said any reduction in revenue would dramatically reduce the SFA's investment in grassroots football and harm the game in Scotland.
"That's why we've gone with satellite. It's nothing to do with depriving supporters from seeing football," he told BBC Scotland.
"It seems like a great idea to say your games should be free-to-air.
"It sounds like you're really considering the public, but it would have serious financial repercussions in terms of income that we bring in to the SFA.
"The biggest part of it in terms of finance is the development of the game.
"We work along with government and they realise that the more kids we have involved in football, playing the game, the better it will be for football, for health and fitness levels.
"It would have a massive impact. We know from the negotiations we've had recently that terrestrial stations can't compete with satellite stations in terms of the funding that's required to take the game forward."
Smith added: "If the BBC or STV make a similar offer to the money that's paid by satellite broadcasters then there's not a problem.
"It's only a bad thing if we lose revenue from it."
The SFA's current four-year rights deal with the satellite broadcaster Sky Sports is worth about £60m and includes live Scottish Cup matches in addition to coverage of Scotland's home European Championship and World Cup qualifying matches.
The Scottish Cup final has long been a protected free-to-air event.
Smith maintains that, under the new recommendations to make the matches free-to-air, there would be a shortfall in income that could not be made up from terrestrial broadcasters.
"We would have no problem at all provided the free-to-air broadcaster paid the same money as a satellite broadcaster," he said.
"Or maybe the government would make up the shortfall in terms of the deal that we get, in order that we can continue to offer the services we offer to football at grassroots, youth and a professional level.
"However, the money would not be available to us, so it would affect the budget greatly and we would do a lot less in the game in Scotland.
"It would affect football going forward in terms of the amount of people who can enjoy the game and play it - and the amount of players we would be developing for the professional game."
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