This paper examined the present status of local newspapers and their problems. It was originated from the fact that the number of local newspapers have continuously increased since 1987 when the establishment of newspaper company became convenient, and that as a result the competition among local newspapers became high and several unexpected negative out comes brought forth. The analytical focus of this parer was placed on the internal and external environments surroundings local newspapers. The results showed followings: There are too many local newspapers competing each other in the same area; Financial crises mainly caused by over-competition are critical; Ownership and business operations are too distorted to take the socially expected role of newspapers; Many newspapers are often mobilized for the political and economic purposes of the owner; Market rules and advertising inducement practices are likely to be violated because of over-competition; the morales of Journalists are decreased and work qualities are deteriorated. On the basis of these findings this paper suggested several policy implications: The structure of ownership has to be changed into a direction where a few major stock-holders cannot influence the whole business operations; Top managers have to change their business motivation from profit-seeking to profit-sharing; business practices has to be open and clean; New editorial polices attracting readers have to be established; qualified Journalists have to be recruited and they have to be retrained throughout their career life.