Throughout the 90s, publicly-traded corporate newspaper groups became one of the hottest investments around. Lots of small town newspapers got bought from their founders and owners, lumped into other groups, then sold and re-sold several times. Along the way, many papers were squeezed several times over for quarterly profit margins, and this was well before the current recession and Wall Street bailouts. The internet hasn't done print newspapers any favors, but the business was in trouble before that wonder ever came along.
All news is essentially local and nobody covers that better than local newspapers. When staffs get trimmed and pared, after the best talent has already been encouraged to leave thanks to low, low salaries, original content is going to suffer, and the experienced selection of what replaces it will suffer also.