This is a very correct question to be asking. The Alden Global Capital guys have been pioneers of this, but are not the only ones of course. Of the papers you've heard of, they own a plurality of them. And what they are most known for is (of course, being PE) optimizing shareholder value. Firing people and replacing local content with wire stories and shared material from other papers in the portfolio.

Their current list of formerly great papers includes the Chicago Tribune, The Denver Post, the St. Paul Pioneer Press, the Boston Herald, The Mercury News, East Bay Times, The Orange County Register, and Orlando Sentinel.

They also bought my hometown daily paper, just a small, nowheresville town. The paper went from being respectably sized for a small town, and featuring many local news stories, to being slim and having one randomly selected story from one of the 5-8 papers they own in the region, and a bunch of wire stories. Once a week, they copy and paste the local police blotter.

The outlook on the news industry is exceedingly bleak. :(

The show "The Paper" actually satirizes this. One bit involves pulling articles from an AP feed and putting it to print and how cutting that feed cut their largest revenue source, not that this means much as the paper is funded by a toilet paper company.

The largest city in the state I used to live in had two daily newspapers. Then it went to one, and some short years later went to none. It was resurrected a few years later, and now runs out of a strip mall. About 10 years ago, I managed to get a copy (I'd moved states), and it was two pages of state/local news, and the rest was filler.

They recently cut production down to 3 days a week and laid off half their already tiny staff.