Independent small-town newspapers are a dying breed, and Rutland Herald publisher R John Mitchell knows it: he recently gave a presentation to his sales staff that began with a slide reading “Newspapers are Dead, Right?” while playing the theme from Mission Impossible. Joking aside, Mitchell is trying, here in Vermont’s second city (population 17,000), to buck the trend in American newspapers towards corporate ownership and shrinking news coverage.

As most newspapers are cutting news staff in search of unrealistic profits, the Herald (in cooperation with a smaller newspaper Mitchell also owns, the Barre-Montpelier Times Argus) maintains a staff of three reporters in the capital covering state government, unheard of for a newspaper with a circulation of 17,000. “Covering state government isn’t the sexiest thing, or what consultants say you should do, but it’s important to us,” he says.

Mitchell inherited that respect for local news from his father, Robert W Mitchell, who bought the paper in 1947 after a career as a state capital reporter. The elder Mitchell became a prominent figure of the Republican establishment that ran Vermont for most of the 20th century, and wrote daily editorials espousing his vision for southern Vermont.

He hopes his 31-year-old son, also called Robert, will grow into a leadership position. Last year he recruited him to come back to Vermont from California and named him special projects editor. It’s fitting that the Herald is published in Vermont, a state that has long gone its own way – it was an independent republic before joining the US in 1791, and today it takes a strong stand against commercialisation by banning billboards and heavily restricting the kind of chain stores that blight the rest of the country. The Rutland Herald was first published in 1794 and is one of the oldest papers in the US, and the oldest still operating under its original name.

Mitchell fits the mould of an old-time conservative; he favours bow ties and still counts the thwarting of the unionisation of the paper’s employees in the 1970s and 1980s as one of his proudest accomplishments. “If you have a union, it means your employees feel like they have to talk to a third party to talk to me and that meant we weren’t doing our job as managers,” he says. But he’s not as passionate about politics as his father – “that gene missed me” – and the paper, like Vermont, has steadily become more liberal.

When Vermont was considering a law to recognise civil unions between same-sex couples, the Herald’s editorial page took a strong stand in favour, in the face of local opposition (although the measure was passed in 2000, legislators in the paper’s circulation area had voted 25-2 against it). “We didn’t cram it down people’s throats,” he says. “To me it was just common sense.” The paper’s stand, and the calmly reasoned editorials by editorial page editor David Moats, won the paper a Pulitzer Prize in 2001, the first awarded to a Vermont newspaper. But Mitchell is hard-headed about what it will take to stay afloat in the uncertain future of American newspapers. “I started out when newspapering was romantic. Now we have to operate in some ways like a chain,” he says. “We have to be aggressive about earnings, we can’t just leave them to chance.”

To that end he has tried to develop new ways of boosting revenue. He has created a small media empire in southern Vermont and counts a total of 41 publications – including websites and local business and lifestyle titles – that are now part of the Herald Association. He has also started selling ads in bulk across all 41 publications, rather than relying on the piecemeal advertising that used to sustain newspapers. But challenges keep popping up. Rising petrol prices have affected the Herald’s distribution, and newsprint costs have doubled over the past year, and are expected to rise 20 to 25 per cent over the next year. “If that continues to go up,” he says, taking a long pause, “some things are going on that I’m not sure about.”

The Herald has reduced the number of staff and spending on news gathering, though it’s still more than the average paper. Mitchell says the Herald used to spend double what the average paper its size spends on news, but has had to reduce that to about one-and-a-half times. “My plan is to get us on the soundest financial footing I can,” he said. “I don’t know where we’re going, but we’re not dead yet.”