I understood that ads paid for newspapers. The nominal fee they charged was probably for pulp and barrels of ink. (If the papers were completely free people would just grab armloads to line their bird cages.)

When the physical paper is gone and delivery is over the wire, free should in fact be doable.

Perhaps the local news fucked up by accepting Google ads. Had each regional, metropolitan area put together their own ad agency they could have served up local ads and likely kept something closer to their previous business model—likely reaped more dosh?