This paper presents a comparative analysis of Large Language Models (LLMs) and traditional Optical Character Recognition (OCR) systems on Urdu newspapers, addressing challenges posed by complex multi-column layouts, low-resolution scans, and the stylistic variability of the Nastaliq script. To handle these challenges, we fine-tune YOLOv11x models for article- and column-level text block extraction and train a SwinIR-based super-resolution module that enhances image quality for downstream text recognition, improving accuracy by an average of 50%. We further introduce the Urdu Newspaper Benchmark (UNB), a manually annotated dataset for Urdu OCR comprising 829 paragraph images with a total of 9,982 sentences. Using UNB and the OpenITI corpus, we conduct a systematic comparison between traditional CNN+RNN-based OCR systems and modern LLMs, presenting detailed insertion, deletion, and substitution error analyses alongside character-level confusion patterns. We find that Gemini-2.5-Pro achieves the best performance on UNB (WER 0.133), while fine-tuning GPT-4o on just 500 in-domain samples yields a 6.13% absolute WER improvement, demonstrating the adaptability of LLMs to low-resource, morphologically complex scripts like Urdu. The UNB dataset and fine-tuned models are publicly available at https://github.com/sameearif/urdu-newspaper-benchmark.