Disney’s (DIS) ESPN launched a new Web site entirely devoted to covering Dallas sports on Monday, marking the newest of its regional sports hubs and the latest obstacle between beaten-down newspapers and survival.

The push by ESPN is aimed at leveraging the company’s global name recognition into new ad dollars at the still-growing local level. But the experiment, which is also being carried out in Chicago and Boston, is infringing on newspapers’ turf and coming at a time when their very existence is being threatened by the weak economy, changing media landscape and poor business model.

“It’s just one more nail in the coffin,” said Philip Meyer, a professor emeritus at the University of North Carolina at Chapel Hill and author of The Vanishing Newspaper. "Success in the media business these days should be defined as sustainability. Newspapers are never going to be the profit machines that they were before the Internet.”

More Competition for Newspapers

The ESPN experiment, which will soon branch out to New York and Los Angeles, represents another headache for newspapers because the sites offer much of what newspapers already provide, and then some.

In addition to original content and all of the stats that have become the norm for sports sites, the regional hubs offer insight from well-known analysts like Peter Gammons, Marc Stein and Ed Werder who have ties with the various regions. And the hubs provide a SportsCenter-styled three- to six-minute video roundup of the region’s sports news each day.

Eventually, the network would like to have its own beat writers for each team in the region, and even provide original content on small college and local high school teams.

With the regional hubs, ESPN is “drilling down and creating a richer, deeper and authentic experience” with the fans, said Jim Pastor, senior vice president of local digital at ESPN.

So far so good. Launched in April, ESPNChicago.com is already the top sports site in Chicago, attracting 700,000 unique visitors in July, according to comScore. That’s up 19% from the month before and 87% since May.

In the first 10 days since its Sept. 14 launch, ESPNBoston.com enjoyed almost three million visits and close to 5 million page views, according to Omniture traffic data. The site also launched with sponsorship deals in place with eBay’s (EBAY) StubHub, Dunkin Donuts, Covidien (COV) and AutoTrader.com.

Those unique visitors and ad dollars threaten to put further pressure on newspapers that have already pared down to deal with the recession and flow of ad spending away from traditional media.

“It shows once more that what used to be a highly segmented industry has now become far more porous,” said Pablo Boczkowski, a professor at Northwestern University and author of Digitizing the News.

ESPN vs. Local Dailies

ESPN’s new competitors appear to be taking the threat seriously. The Chicago Tribune launched a new blog network in May called ChicagoNow that has been a big hit, drawing 50% of its traffic from sports fans.

“We thought that was a way of sort of covering that kind of rabid fan base that sometimes a newspaper site may not get at. That was our one way of going at ESPN,” said Bill Adee, editor of digital media at the Chicago Tribune. “Certainly the worldwide leader in sports isn’t anyone that anybody should take lightly.”

While ESPN has had a successful launch of its Chicago site, it’s not clear it’s been to the detriment of the Tribune.

“I continue to read the Chicago Tribune online but also the ESPN Chicago site. I don’t think one cuts into the other. We certainly haven’t seen evidence it’s causing attrition at other sites,” said Andrew Lipsman, director of industry analysis at comScore. “We often see that large brands on the Internet are able to branch off into more specific markets. I don’t think that necessarily represents a threat to newspapers.”

Adee says he sees ESPNChicago as a direct competitor but that he hasn’t been made aware of a loss of ad dollars because of the new site.

“At the end of the day, we still have more local sports reporters on the streets of Chicago than ESPN does. And that should win out over time,” said Adee. “Now ESPN has great promotional venues, but we have 900,000 newspapers delivered on the weekends to people’s homes in Chicago.”

That competition could heat up as ESPN mirrors newspapers by hiring local sports writers to cover their own beats in each of these locations.

Mike Reiss, who was a writer at the Boston Globe for four years, recently joined ESPNBoston.com to cover the New England Patriots.

“Obviously there are some elements of competition. It’s just not the same as the Globe versus the Herald. That’s been a knockdown dragout competition,” said Reiss.

Changing Consumption Habits

For its part, ESPN doesn’t see itself as a direct threat to newspapers.

“As a company, we are fans of newspapers, and not believers they are going away.  They face challenges that will force them to evolve,” said Paul Melvin, an ESPN spokesman. “But those challenges have, really, very little to do with us specifically -- but rather about the way media and people's consumption habits are changing.”

Those changing consumption habits have taken away a virtual monopoly once owned by newspapers. “They owned the tollgate on the road that carried information from retailers and customers. The Internet came and broke that tollgate,” said Meyer.

The ESPN experiment could soon push ad dollars away from local papers’ sports sites.

“I think if we see a greater return on ESPN for the spend, then you will see us migrate more towards that. I don’t think upfront we’ll rule out continuing to have relationships with local newspaper sites,” said Ray Elias, marketing director at StubHub. “I don’t think we’ve seen the same level of success in local newspaper sites as we are in ESPN. The local newspaper sites are just not as sophisticated a user experience”

The ESPN move comes as newspapers continue to experiment with new sources of revenue. Minnesota’s Star Tribune recently announced its second attempt at a paywall by charging $20 a year for greater access to the paper’s Vikings coverage, including chats with a beat writer, a blog from a former player, insight to columnists and picture galleries.

News Corp. (NWSA), the parent of FOX Business as well as the New York Post and The London Times, has floated plans to begin charging for online content of more of its news sites.

It’s not clear yet if ESPN will be able to replicate its early success in Chicago elsewhere but the network seems open to branching out beyond these initial five cities.

“In principle it’s a great idea, but it depends on the delivery. You really have to know what moves a city,” said Boczkowski. “It’s not easy to localize. Great companies in the past like Microsoft and AOL have tried to localize content and failed.”