Rangers and Celtic, the dominant forces in Scottish football, are planning a joint bid for the television rights to the Scottish Premier League, which would enable them to launch a domestic TV football channel.

Rangers yesterday confirmed the two sides have held talks about buying the rights, which they consider to be worth more than £25million over two years, after the collapse of the Irish broadcaster Setanta.

The Old Firm are unhappy about a “cut-price” deal proposed by broadcasters Sky and ESPN, who are thought to be offering £65million for five years. The previous £130million contract with Setanta was worth double that.

The challenge facing the brokers of the new deal now is to convince the other clubs in the league that they will benefit more from it than they would from the deal on the table from Sky and ESPN.

The 12 SPL clubs will meet at Hampden for their AGM tomorrow where the proposal, although not formally on the agenda, will be discussed.

Such a move to buy the Scottish rights raises several options. Rangers and Celtic could, in theory, make a profit by selling on the rights to a new bidder. The sentimental option, however, would be for them to launch their own pay-per-view channels with a delivery mechanism such as Sky. As part of a Scottish Premier League Channel, the big clubs could customise their own channels. Given the huge fan base of both clubs, the idea of a Rangers or a Celtic football channel hold appealing economic possibilities.

Both clubs are well aware how lucrative Old Firm derbies would be on a pay-per-view platform.

The Old Firm have spoken in private for some years about their desire to own their own broadcast deals, whereby both clubs, a bit like Real Madrid in Spain, would be able to sell individual matches or groups of matches to any bidder who came forward.

Both Rangers and Celtic have felt aggrieved at the paltry income they make from TV, together with their conviction that the rest of the SPL clubs ride piggy-bank on the Old Firm's appeal and duly syphon-off TV monies which might rightly be theirs.

Rangers and Celtic routinely make as little as £2.2million each from broadcast deals, from the £13million which had been offered annually by Setanta. By contrast, Barclays Premier League clubs in England earn up to £35 million a year from television. Real Madrid last year earned £135 million from their own broadcast deals.

In theory, the infrastructure is already available for Rangers and Celtic to form their own SPL channel. The biggest problem the proposal faces, according to experts, is convincing the other premier league sides that it represents a good deal.

“It will depend on how compelling the business case is,” said Raymond Boyle, an expert in sport and the media at the University of Glasgow. “What you are talking about is a consortium of the Old Firm securing the SPL rights but you can only do that if the others are willing to sell.”

Martin Bain, chief executive of Rangers, confirmed that the Old Firm have held talks regarding broadcasting arrangements, adding: “We are deeply disappointed at the proposals on the table and are exploring other avenues. At this stage I don't want to comment further.”

A spokeswoman for the club later said the two sides felt they had to discuss the issue because the Sky and ESPN deal was “so low”.

Martin Ritchie, the Falkirk FC chairman, said the Old Firm bid should be given full consideration.

“But what Falkirk want to see is the guarantee of money in the immediate couple of years,” he said. “It is important that we are not left with no TV deal and we don't want to see a substantial drop in our monies

The SPL is in a race against time to sign a deal before the season begins on August 15. Several clubs, the smallest of the 12 sides that make up the league, depend on television income for their survival.

A source close to the discussions said: “The Old Firm are very clear and united on this. There is a feeling that the offer on the table right now is tantamount to these broadcasters holding our game to ransom.

“In effect, Scottish football is being asked to drop its standards and accept whatever they offer."

A spokesman for the SPL said it had yet to receive a proposal from the Old Firm in relation to TV rights.

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