I think one of the keys for newspapers is finding your hook and charging extra for that.I see newspapers not going the route of needing a subscription to access any news story on the website, but rather something similiar to ESPN.com or NYTimes.com. You want the latest stuff from the AP wire, your most basic of news/gamers and any local news that breaks before the next day's paper comes out, it will be free. But you create content above-and-beyond the basics and charge for that. In sports, I think you create specialized content for your big-time teams and charge for that. There is no reason that Boston papers should not have special pay Red Sox content and I can rattle off a ton of examples off the top of my head of other papers who either are already doing this or should follow suit (Milwaukee and the Packers, Indianapolis and the Indiana basketball, Birmingham and Alabama football, Dallas and Cowboys/UT football, St. Louis and the Cardinals, Kansas City and the Chiefs, etc.) Why is Rivals so successful? Because they give the hardcore fan the deluge of information that they want. We aren't filling that deluge and taking advantage of that fan's desire to read anything and everything he/she can about their team. WSJ is the Rivals.com of the business world. You don't read the WSJ for the lifestyles section. Their readers want national news, incredibly in-depth business reporting and incredibly conservative editorials and are willing to pay for the level of detail WSJ brings to the table.
You make the pay content free to anyone with a hard-copy subscription or a reasonable price otherwise. Any news story of high interest, you saturate your paid-content website with (special election coverage, extra in-depth coverage of the big murder trial, BLOGS!, etc.) and promote the hell out of your paid-content section in the hard copy edition. The papers that get left in the dust are ones like my old paper, where the only reason it succeeds is because it's there. The only reason to read that paper is that it is pretty much the only paper of record within a 50-mile radius and you can't go anywhere else. There is no one overwhelming team/story, sports or news, that you can point to and say, "If we saturate the hell out of that, readers will come running." Like every other newspaper, they will eventually have to create paid website content, there just won't be anything there that people really want to pay for.