NEWSMASTER is hardcoded into /usr/llib/innshellvars.
That makes sending the daily news reports to somebody other than news@localhost impossible.
innshellvars should NOT override any variable, especially not NEWSMASTER, if it has been set in /etc/news/inn.conf.
(I do know that the latter file doesn't have a "newsmaster:" line normally, but I consider this part of the bug.)
You can add entries to /etc/aliases (alias for news@localhost or set
newsmaster user "newsmaster: local_username").