Isle of Man Newspapers has admitted it couldn't cope with increased competition from the BBC.
Editor Richard Butt wrote to the select committee looking into the television licence fee, saying more Manx news coverage from the broadcaster would mean the Island faced being swamped with editorial content.
His email was sent in September, two months before the newspaper announced it would close its presses on the Island and lay off collating and printing staff.
Mr Butt revealed he was against the committee's suggestion the BBC should spend around £1 million more each year on news coverage, claiming those resources would destabilise his company.
Figures released by political member of the Department of Economic Development Alan Crowe MLC show the government spent more than £236,000 on advertising with Isle of Man Newspapers in the last financial year.
Tynwald is due to discuss the select committee's report and the response from the Council of Ministers next week.
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