Size of the Gap

A philanthropic or government investment of $1-3 billion annually is necessary to save local news and create a system that would provide adequate journalism for American communities. There are few points of reference:

The scale of the collapse

Drop in newspaper revenue from 2004-2018: $40 billion
Drop in the number of newspaper employees 2004-18: 33,530, costing roughly $2.3 billion (assuming $70,000 per reporter compensation)
Local digital ads going to Facebook and Google: $42 billion

Estimates of need:

Boston Consulting Group: $0.75 – 1.75B
FCC 2011 report: $265 million to $1.6 billion
American Journalism Project: $1-2 billion
Rick Edmonds (Poynter) estimate: $1.6 billion
Counties without a daily newspaper: 2000 (x $500,000 to stand up a news operation=$1 billion)
Free Press: $830 million and $1.2 billion

Governmental units:

One could also say that each governmental unit should have a reporter watching over it. These estimates do not subtract the current reporters on the ground; on the other hand, some government units need more than one reporter, so this is a good rule of thumb.

If every municipal government had a reporter ($70,000 cost per person), that would be $1.3 billion
If every school district had a reporter, that would $1 billion
If every county had two reporters, that would be $424 million