What it means
A rag is a dismissive way to talk about a newspaper, magazine, or news site you think is trashy, biased, or barely doing journalism at all. It usually gets aimed at tabloids, but any outlet can catch it if it's more bothered about cheap outrage and clickbait than getting the facts straight.
Usage examples
"Did you see what that rag printed about the mayor? Absolute guff. I wouldn’t wipe the dog’s paws with it, just wrap chips and sling it."
"The local rag printed a front page about a phantom fox terrorising the high street, two pages of conspiracy theories from blokes who clearly have not slept since the local pub closed."
"He used to write for a serious paper before he moved to that rag, now he files three opinion pieces a week about traffic cones and the price of butter at the petrol station."
"Don't send me a link from that rag, mate. They'd print ghost sightings and call it breaking news."
"That rag's got a new headline every hour, and somehow none of them say anything worth knowing."
Where it comes from
This use grows out of rag meaning a bit of old cloth, something cheap, worn, and not worth much. By the 18th and 19th centuries, English speakers were already flinging it at newspapers they saw as flimsy, trashy, or beneath respect. That grubby little insult stuck hard and still lands today.
