Well, here in Europe you're empirically being shown wrong. Local newspapers disappear the first; first step is that they're bought by a larger entity, second step is the removal of local news from them (because too expensive to write up), third step is killing them. Then, after a large brand has killed several smaller ones, they get bought by a bigger entity or go bankrupt.

I'm not sure how you can say that producing a local news story is cheap. It's very expensive on a per-reader count (which is all that matter) because there are relatively few readers. If you write a national story, you can sell it to everybody in the country. If you write a local story, you can only sell it to a subset of those people. Writing about a bake off costs the same as writing about a political debate on a national topic. It's quite obvious that writing for a small audience is a lot harder to have a positive ROI than for a large audience.