Here's a solution that is far worse than the problem:
Newspapers perform a public service for democracy and should be allowed to operate as tax-exempt non-profits, U.S. Sen. Benjamin Cardin, D.-Md., proposed Tuesday.
Cardin introduced a bill that would explicitly include newspapers among organizations eligible for 501(c)(3) status. The non-profit status is the same that public radio and television have now.
A watchdog of the government cannot continue to perform that function if it is essentially bailed out by the government. Any newspaper that decided to go this route would be doing everybody a favor to just go ahead and die. Accepting non-profit status also brings certain requirements, such as not endorsing political candidates. These "entities" might survive, but they wouldn't be newspapers.
Besides, a lot of papers seem to be achieving non-profit status all on their own.