Their editorializing of the war in Iraq alone just proves they may not be able to turn things around. How does a newspaper become fair and balanced when everything they stand for is antiwar and anti American? If they really believe a lie is the truth, there's no way they can become fair or balanced.
You have to get them to withdraw from national and international news for the most part.
It is my contention that ALL papers can only survive if they go to the covering the stuff that isn't usually on the internet...and that is LOCAL stuff. And coupons.
Of course, I am looking at this from the point of view of establishing a successful business. I fear a great many newspeople would find this type of coverage unimportant and boring, and therefore will continue on their present course.
My theory rests on the one thing that will get people to buy papers: seeing their name and/or picture in it (or even more important, their child's). This is the only thing I can see that would get a person interested in buying a paper. All other news is found faster on the internet and cable news.