Your definition of 'news' in this context is pretty much on the mark - it's used in this context to describe someone who is famous or noteworthy in some fashion, i.e. to be famous enough to be newsworthy.
The scene in question is when Jesus is brought to Pontius Pilate after he has been betrayed by Judas.
Pilate: Who is this broken man cluttering up my hallway? Who is this
Soldier: Someone Christ - king of the Jews
Pilate: Oh so this is Jesus Christ, I am really quite surprised
look so small - not a king at all
We all know that you are news - but
are you king King of the Jews?
Pilate is saying that he recognises that people have heard of Jesus, and his reputation (presumably for his teachings and performing of miracles), but is questioning if he is really important enough to have earned the title 'king of the Jews'.