By late fall 2009, with the Observer s AP contract up for renewal at the end of the year, Thames faced a critical decision: whether to extend the Complete wire subscription that Charlotte had enjoyed for generations, drop back to the Limited tier, or eliminate the AP altogether and instead turn fully to alternative news sources. While cost would be an important factor, Thames dilemma transcended dollars and cents. Beyond budgetary ramifications, the decision could have profound content implications and set a precedent for the future identity and purpose of the newspaper. He began assembling a pros and cons list for each of the options and also consulted with Drescher, his colleague in Raleigh.

Bottom line . With advertising revenue declines making cost efficiencies top-of-mind in the Observer newsroom, Thames had no choice but to start with the bottom line. Switching to Limited would save moneymoney that could then be re-dedicated to pressing needs such as staff and technology. The decision, however, became more complex in light of the Limited pricing structure.

Thames acknowledges that we know we need AP in many waysneeds that exceeded Limiteds skeletal 40-story daily offering. Charlotte would have to buy back into several AP content verticals to buttress the Limited foundation. Sports were a must. We dont see any way around that, he concluded. Theres no supplemental that would take care of that for us. News Analysis and Money & Markets were also likely add-ons. The papers annual fees would still drop, but not as dramatically as Thames had hoped. All told, the Observer would save just under $100,000. Thames sized up the quandary:

When I looked at the cost structure of going with the full AP versus Limited, it was, to me, unfair that going to Limited wasnt going to save me that much money because the service itself is quite a bit different. But even so, I could save enough money to preserve perhaps two or three jobs in my newsroom. I had to think hard about that because if I could make this work, then I could keep these local resources trained where they need to be.

Listen to Thames discuss the AP Limited dilemma.

Content . Then there was the matter of content. Thames felt confident in the local-first strategy that the Observer had adopted. He notes:

Jim Collins in Good to Great talks about what are you going to be the best in the world at? [1] We thought there was a good, strong message there for regional newspapers. And that is, Were going to be the best in the world at covering our regions. Were not going to be the best in the world at covering the world. There are others out there who are aspiring to do that. We think our job, actually, is to interpret the world for people who live in our region. Its important that we understand world and national news, but we then need to take what we know and make it relevant to living in Charlotte.

Community feedback suggested that readers hungered for local news. Meanwhile, the Observer s portfolio of local initiatives, from the Charlotte News Network to social media tools, engaged the audience in new and dynamic ways, introducing diverse, complementary sources of journalism and extending the papers brand deeper into area neighborhoods.

When it came to covering the rest of the state, Thames also liked his position. He estimated that between them, the Charlotte Observer and the Raleigh News & Observer generated nearly half of the material that ran across the North Carolina AP wire on any given day. The news sharing arrangement between the sister papers had been in place for nearly 18 months. Though the Observer still subscribed to the state AP, Thames saw potential for the two dailies to join forces with other papers around North Carolina, which could eliminate the need for the state wire completely.

Converged state coverage was only one example of a larger collaborative spirit pervading the industry. In most cases, papers of any size across the state arent really competing against each other directly anymore, Thames explained. Informally, theres a lot of [cooperation] going on. [Newspapers] are just saying, lets work together. Well build our own partnerships. Its not just within companies. Its across company lines.

Regional . On a regional level, Editor Thames and National Editor Mathieson bemoaned that a move to Limited would strip away their access to the South Carolina state AP wire, from which they frequently plucked content. In fact, Mathieson emphasized that, in many ways, carrying the South Carolina wire was of greater importance than the home state feed. However, CaroNews was continuing to evolve, giving the Observer access to a widening array of stories from its McClatchy brethren in Columbia, Myrtle Beach, and Rock Hill. In addition, the paper continued to pay for supplemental wire service from the New York Times News Service and Bloomberg, and through its corporate parent, it had access to McClatchy-Tribune Information Services. All of these enhanced its regional content.

Nonetheless, to break from the AP entirely would be painfulto readers as well as to editors. Much of the audience that would pick up the newspaper in the morning still looked to the Observer for many of the features that AP delivered. We recognize that for many peoplefor probably most of our readerswe are a primary news source for the world beyond the Carolinas, Mathieson explains.

As a daily page filler and news compass, the AP still presented strong value to the Observer , especially as its own resources thinned. There was still no viable alternative to APs sports service, which provided abundant content in one of the Observer s most popular and heavily advertised sections. Though Bloomberg was pushing to offer stock services, APs Money and Markets set the standard. There is essentially no other provider for stock tables printed in newspapers, emphasizes New Products Editor Gunn. We print 600 a day. If the paper had no choice but to buy back into multiple AP verticals, then was it prudent to vacate its Complete subscription in the first place?

Intangibly, the daily alerts and digests that were bundled into the Complete service helped guide the Observer through the daily news cycle. The digests, which provided routine listings of the stories that AP was moving across its wire, were of particular importance. It's an easy way for wire editors to see what all is on the wire, without having to trawl through thousands of stories and write-throughs, says Mathieson. He describes alerts as short headlines that report a development about to move as a bulletin or an urgent. Theyre very important. They let me know whats happening, quickly. Though social networks such as Facebook and Twitter, and 24-hour cable news networks, were becoming handy tip sheets, AP was still the most authoritative source for breaking news.

Thames mulled his dilemma: a deadline to meet, and a franchises future to protect. For generations, the AP had provided the Observer with a valuable set of services that contributed in crucial ways to the excellence of the paper. But in this new century, could the Observer any longer afford the AP? Could it afford to do without it?