Last year, national media organizations like the New York Times, the Wall Street Journal and ESPN began an invasion of local markets. With newspapers collapsing across the country, these national properties are seizing the moment and gobbling up local talent as they position themselves to be the new go-to source for local information. These nascent efforts are another blow to local media outlets that find themselves against the wall, with no plan for the future. As these local organizations dither, national competitors are innovating, attacking, and searching for a local media model that will work in the 21st century.

The products offered by the Times (so far in Chicago and San Francisco) and the Journal (in San Francisco) are in and of themselves not that threatening to local newspapers – yet. Each paper is offering a few extra pages in their locally-distributed print editions and some small city-oriented tweaks on their websites. Neither appears to have a local advertising sales force outside of New York and the special pages on their websites are syndicating advertisements based on the viewer’s geographic location – same as the rest of their sites – and not forcing Chicago or San Francisco ads.

As experiments, however, these city editions are clearly threatening for one important reason: they reveal new competitors, with vast resources, that are willing to take a chance on novel partnerships and approaches. The Times has partnered with the Chicago News Cooperative, headed by the former managing editor of the Chicago Tribune, and has a similar Bay Area collective in mind as well. Though it seems unlikely that 2-4 pages of local content will persuade subscribers to switch from the Tribune or the San Francisco Chronicle to the Times, these initial steps towards developing a new hybrid model for producing local news may prove to be a big advantage in the future. Local newspapers need to figure out ways to become new media operations, and they’re falling behind.

Meanwhile, ESPN has already launched city-specific sites for Boston, Chicago, Los Angeles, and Dallas and has a modest content sharing agreement for non-sports content with the Huffington Post (which has launched its own series of pseudo-local websites). Unlike the Times and Journal, ESPN is already a real threat to local news outlets. In the analog era, imprecise measurement of audience usage patterns (and an anti-sports bias) meant that the expensive and prestigious advertising was placed with the hard news. Online, ad revenue is directly correlated with eyeballs: news organizations make their money off their audience, not a perception of their audience. Scan the most viewed or emailed links at your local news website: chances are, sports pages will be heavily represented. In the digital era, sports are vitally important to the economic well-being of local news outlets.

ESPN’s new city sites strike at the heart of the local franchise. As pseudo-local options, they siphon away pageviews and offer local advertisers a tantalizing option. A quick look today at ESPN Chicago finds a package of Illinois Lottery ads – revenue that local news operations can ill afford to lose. Without this revenue, local outlets may not be able to afford the talent that they have – further undermining their future competitiveness. And, the revenue gleaned from sports advertising that may have been farmed back into hard news production at a newspaper will simply support an improved sports operation at ESPN.

For those interested in a strong local news media, the picture just got bleaker. Local news outlets are seemingly under fire from all directions. Their economic standing is perilous, they have hemorrhaged talent, and national media vultures are circling. And yet, these organizations continue to follow a cost-cutting strategy instead of aggressively innovating. The longer they resist proactive change, the more likely a future of national news outlets with regional editions becomes.