The movie was a big ol' flop when it was released in theatres back in the day and it's not hard to see why. For one thing, Disney live action musicals weren't exactly a big draw at that point; all the noise and attention were going to the animated films of this time period -Beauty and the Beast (91), Aladdin (92), The Lion King (94). Also, Newsies suffers from some plot deficiencies which I won't get into here, but they do detract from the film. And Ann Margaret's role... no. Just no.
Since its release on home video however, Newsies has developed something of a cult following and again, it's not difficult to see why. It's got an attractive, charming cast and some very catchy songs- no surprise there, since Alan Menken was writing them. It's a lively, feel-good film and if the plot occasionally doesn't hold together, well, sometimes it doesn't hurt to put the brain on automatic pilot and just enjoy the ride.
Oh- and in 2011 Disney came out with a live stage version of the musical which became very successful, eventually winning 8 Tony awards. I haven't seen it so am not sure if it's an improvement on the film or not.