Sports and Economics: Local Papers

In a new (oddly serious ) feature I plan on randomly doing is sports and economics. In the first piece is trying to get a grip on the potential impact of at least the short term disappearing local newspapers.

For those that are unaware newspapers, specifically your local papers, are dying. Newspaper circulation peaked in 1985 and with the increased popularity of the internet their revenue has plummeted (average ad revenue down 18% from last year, classified down 31%). This general trend isn't even touching the number of awful debt maneuvers that are felling even those newspapers in the black such as the Tribunes recent bankrupcy or the Times borrowing $225 to handle cash flow issues.As a number of recent business projections have put it -its a question of when not if a major market will be de facto newspaperless (the leading candidate is Miami to get there first).

What does this for a city not to have a de facto newspaper? I've outlined a few ideas

Good/Neutral
It's distinctly possible that the internet and local blogs will simply replace local papers. Certainly the benefit can be a far more competitive marketplace of ideas where better analysis will rise to the top. These blogs might even be able to get press accrediation and therefore at worst coverage of the local sports team will be no different than currently and at best, the coverage could actually be better.

Bad
There are a number of potential downsides though to the disappearance of the local press. The first is that newspaper provides a common starting ground for the community of local sportsfans. I'd argue sports serves two purposes in American society: the first an opiate to distract from reality but equally if not more important is its community building activity..the connection of locals to a specific point of shared understanding. The downside of the internet and blogs is that the readership and hence the shared understanding is simply less than a mass marketed newspaper. To what extent does a disappearing focal point of fandom decrease the community experience?

The second and related issue to the possible decline in fandom experience is that newspapers far better than television develope fans interest in non-star players. For all our favorite teams , there is typically a corresponding local fan favorite that falls far short of being a star. Newspapers often can develope the personalized stories that allow for the emotional connection to the non-star which televisions with limited time frames simply do not. Again a possible issue in decreasing the fan experience.

The final and possibly most serious issue of the current decline in newspapers is that the vacuum might not be filled no matter the desire. But doesn't capitalism mean that unserved markets will eventually be satisfied? Not necessarily. Its ironic that Paul Krugman recently got the Nobel Prize (in economics) as his work speaks directly to this. What Professor Krugman's work speaks to is that for a number of reasons businesses will often design their product for the largest market and ignore less developed areas which can create a self-reinforcing equilibrium. For example, let us assume that ESPN replaces the vaccuum of sports communication left by newspapers. Let us further assume that they focus their baseball coverage on the largest market (the Red Sox v. Yankees rivalry...a stretch I know). What can easily transpire is that over time given the constant news saturation on the topic more fans gain an interest in these teams, less on the local, thus creating a feedback loop for less non-East Coast baseball coverage. In essence, even if ABC-ESPN is completely profit motivated (and I have my doubts), there can a dramatic change in the types of information flows that are occurring with local interest outside of the megalopis drying up and replaced with something else. Ultimately its a seperate issue if this is a good or bad evalution (personally I think bad) but its hard to ignore the possible distributive effects of disappearing newspapers IF national media replaces it.

So what's your thoughts on what (if any) are the effects of city losing its newspaper?