This paper (pdf) by Sam Schulhofer-Wohl and Miguel Garrido studied the impact of the closure of the Cincinatti Post at the end of 2007. And they found that:
This isn’t conclusive. As the authors say, their results are statistically ill-defined. And they could only look at the short-term effects of a newspaper closure. It’s possible that, in the long-run, the adverse effects will fade as citizen journalism fills the void; maybe there‘s a case for subsidizing this too. And, of course, there are countless dangers that the subsidies will merely prop up worthless papers, or even further weaken democracy as journalists don’t bite the hand that feeds them.
Nevertheless, perhaps we shouldn’t write off the importance of the MSM so easily.