OK, I work for much two smaller papers than what seems to be the majority of posters here (metros), so I may have a different take on this.
Let me get this straight. Two sister papers -- daily papers, I take it -- merge their sports departments and increase their high school coverage to ... 11 teams?!
My part-time gig is at a small daily in northwest Ohio and my full-time job is at a twice-a-week paper in a nearby town (I'll explain another time in another post, but it does work). The daily paper covers 14 high schools (11 with football) along with a Division II college and a Division III college, all spread out over five counties. One of the stringers also covers Ohio State football (home and away), while we have a few columnists for outdoors, bowling and local racing. The twice-a-week paper covers eight high schools (six of which are the same as the daily paper, and six of which have football), spread out over three counties.
The daily paper has three full-timers, two part-timers and a pair of stringers. The twice-a-week paper has me and a stringer (forgive the grammar).
I realize the two papers which just merged probably also cover some pro and D-I college teams, so there's obviously work there. But if the daily paper I work at only published local rec sports and briefs a couple times a week and cut way back on the non-revenue high school sports (I'm not familiar with the area in question, but that pretty much sounds like everything but football and boys basketball) our readers would be righteously pissed off.
And who cares if they put national box scores, NBA Finals and World Series stuff online? Fans can get that anywhere on the Web. Unless you're staffing the event, leave that stuff off the Internet and use the Web to broaden your own coverage.