IMO, preps coverage is the one place where a newspaper is indispensable.
In Indianapolis, where I live, I can get all kinds of coverage of the Pacers, Colts, IMS, IU, Purdue, Butler, et al, without ever opening a copy of the Indianapolis Star. I can read Bob Kravitz's columns at a TV station website, Mike Chappell's outstanding Colts coverage at another TV site. There are tons of blogs and fan sites of varying quality, some of whom employ journos, some of who don't. Of course, the teams themselves provide (biased) coverage, too.
Preps is a two-edged sword. It's small enough that you're not going to have *any* other coverage, but also very hyperlocal. Our local school is a BIG deal in our community, but people 10 miles away won't care. A small community daily should focus on sports coverage - it's the one thing that can sustain - but good preps coverage that casts a wide net on a Friday during football or hoops season can also keep people reading the metro. It's the one thing we do that readers can't really get anywhere else.