Clip here. He had to have switched papers, but where? His sleeves are billowy in traditional wizard style, but I don’t see him do anything with them.
Most probably there’s a pocket inside his original newspaper that contains the second. I believe I recall the trick from a childhood book of magic.
I thought maybe something like that, but then what became of the torn one?
You can see him stuffing the pieces of the torn paper into a pocket (or something) just prior to him revealing the intact paper. His hand motion changes from tearing to poking. So to speak.
M
Another pocket in the second paper, or perhaps he’s just holding it hidden behind the last page of the new newspaper.
Illusion, Michael. Tricks are something whores do for money… or candy.
It did kinda look like he was folding it back into the unwrapped version.
That’s the Gene Anderson Newspaper Tear, one of several different methods of doing the torn and restored newspaper illusion. Naturally, I can’t tell you how it’s done, that’s against the magician’s code, but if you’d like to learn how to perform it yourself, you now know all you need to know.
Oh, no pocket.
At around 27 seconds left, you see him folding the torn pages and they stiffly hold, suggesting a hidden wire of some sort. Then the fingers of his right hand poke into the bundle and find the hidden intact sheets, to which the bundle is glued. The shredded pages, in their tight bundle, are hidden inside the intact pages, likely behind the page with the full-size photograph of a woman at :17, which he does not turn to show the audience.
Well, that’s one valid hypothesis. There are variations, and in any case I think the bit is very well done. Made me laugh.
“Here you have the front page, for people who want to read the news. And here’s the comics, for people who can’t read, and here’s the editorials, for people who can’t think!” 
What I don’t understand about the magician’s code, is a honorable magician can’t tell you for free how a trick is done, but he will for 20 bucks?
Hey, it ain’t a poor magician’s code.
Here’s the way most magicians think about it. If someone (usually but not always a youngster) has a genuine, serious interest in magic, and wants to learn and to study the ‘art’, then we don’t mind sharing the knowledge we have. In fact, magicians share information all the time, through DVDs and lectures and books and one-on-one sessions. Not just the secrets and methods, but other stuff as well, like building a business and stage craft and presentation skills and so on.
However, we figure that if someone doesn’t have a serious and significant interest, and if they are just idly curious about how the tricks are done, we prefer to keep the secrets to ourselves as far as we can, and within reason. We do this for a variety of reasons. One is that part of the job is to create pleasing, entertaining illusions of magical and impossible events, and that’s not so easy if the secrets are well and widely known. Another is that not everyone wants to know how the tricks are done… some people just enjoy the mystery and the entertainment, and are happy to leave it at that.
So, in general, we discourage just ‘giving away’ the secrets and methods we use, especially when these are broadcast to people who don’t even have to go to any trouble to watch (i.e. the Masked Magician shows) and don’t have any particular interest. But we don’t mind sharing with those who have a serious interest and who are willing to take some time and trouble to learn. If someone is willing to go to a magic dealer and pay $20 for a trick or a DVD, we figure that this person is probably not just idly curious, and is probably really interested in learning.
Another factor is a person’s right to earn some profit from their creativity. In some cases, a magician spends a lot of time developing and inventing a particular trick, or a magic routine, book or DVD. When people pay their $20, he gets some reward for his intellectual property. If they pay nothing, he gets nothing.