Broadcast licensees, as you are well aware, are mandated to operate in the public convenience and necessity. That part of the communications act of 1934 was one of the few chunks spared cannibalization in the most recent revisions. This means -- or at least has always meant -- that they have to do what they say their going to do. Since they said in their applications that they are going to do "x" amount of news, they have to do it.
The defense "lots of other people in our area do news, so it's not so important that we do it" hasn't worked when radio and TV stations have tried to worm out of their self-imposed commitments in other communities and it shouldn't here either.
But more basic than that, you (inadvertently?) fell into a trap when you adopted the language of management and referred to a "news product." It's not a product. It's a service, and a necessary one.
They're not making any money? Sell the license to someone who can.
But Cox crying poverty is a bit disingenuous. They're bidding on spectrum, they're making significant grants to the University of Arizona. And while they're forecasting a revenue decline for next year, they're not applying for welfare.