“Sales slump spurs layoffs at Sony Music.” That headline from Variety last week caused more lost lunches than The Exorcist.

Not just because it meant Sony, on the heels of Michael Jackson's dismally selling Invincible, had just dropped 2 percent of its 5,000 employees. A persistent slump affected imprints like Columbia and Epic, which had had a decent year, thanks to Marc Anthony, Aerosmith, Shakira and Bruce Springsteen's The Rising. It gets scarier when you consider WEA (Warner/Elektra/Atlantic), who purged rosters last year, may do likewise, potentially discarding its money-losing partner AOL. So too, goes the rumor, may Universal.

Add to this the arbitrary, exorbitant prices placed on the value of artists seeking control of master tapes, higher point participation, frenzied file-sharing, rampant Internet piracy of copyrighted music, mudsliding copyright laws and the fact that 98 percent of music out there sucks harder than a baby to a teat -- who the hell would start a label even if they could?

"All the above. That's why we started The Foundry," says Frank Chackler, Philly-born industry vet who, with local entertainment lawyer James Elam and producer Mike Clink, co-founded the full-service, nationally distributing label. The Foundry's discs will be distributed through its joint venture partner, the Jenkintown-based Zephyr Media/Universal, which David Chackler CEOs along with several industry vets (including son Frank).

Housed at 16th and Walnut streets, The Foundry holds in equal status an in-house music production company, entertainment/music management divisions and sports management.

Sounds expensive. Yet Elam and company believe the biz can be fair and friendly to artists financially: maintaining smaller budgets yet offering big label-comparable service and monies under The Foundry's wide umbrella. "We're all about artist development," he says bluntly.

Who are these guys? Clink, the Brendan O'Brien of '80s metal, produced Guns N' Roses' Appetite for Destruction and Use Your Illusion I and II, Metallica's ... And Justice for All, Sammy Hagar, Heart, Mötley Crüe and Whitesnake. Elam represents Jill Scott, Jaguar, Kindred, Ursula Rucker, Freeway, Philly International Records and more -- navigating tops in hip-hop through unsteady legal waters.

Frank Chackler has had stints as A&R director at Arista, co-managed Mötley Crüe through Top Rock Development, booked L.A.'s Roxbury, headed up All Nations Music Publishing and launched Slipdisc Records with his father. "My plan in life was to, from interning on, learn every aspect of the biz and work each end," says Chackler, whose dad taught him the biz could be as fascinatingly aesthetic as the music. David Chackler was an exec at the original Sound-of-Philly label Cameo/Parkway; he hooked Mick Fleetwood up with Stevie Nicks and Lindsey Buckingham for the Fleetwood Mac that recorded Rumours; he launched Queen in the U.S.; and he founded, with Luther Campbell, rap's Luke Skywalker label. "Keith Moon ate at my house. I sat on Roger Taylor's lap as a kid. That world, the business, was second nature to me. It was all I ever wanted to do," says Frank, who, with a bent toward rock, tried to bring GN'R and Jane's Addiction to Arista during the Whitney-Billy '80s. "It was frustrating that Arista couldn't find a place for rock amidst the R&B."

Chackler met Clink in L.A. during the end of hair metal's reign, when Clink produced Roxy Blue, a band Chackler co-managed. "By the time their record came out, grunge hit," says Chackler. "That craziness made me want to see great melodic rock rule again. And rap -- I always liked hip-hop but I didn't think it became song-oriented until Dr. Dre." West-Coast-rooted Clink and prodigal Phillyite Chackler -- then working with Zephyr, who had already signed Hall & Oates -- kept in touch, slowly fusing their own production company. Being in Philadelphia and knowing its history made Chackler yearn to involve himself in hip-hop in order to create a new-school version of Zephyr music's old school.

Enter Elam, a Chester Avenue native who established his presence in hip-hop's continuum through his empathetic but blunt largess. "I've been influential in shaping things," says Elam. "I may not have made them. But I think I helped shape where some of my clients went, took them beyond the October Gallery and such." Elam's tough legal-eagle ease hid his deep-down interest in running his own label and a pure artist advocacy. "I wasn't ever looking, per se, to run a label. But I did want to have control over a musical end. I didn't ever want to be general counsel for a label," says the lawyer, who just got Jill Scott to Hidden Beach Recordings.

"What bound Frank and I together so immediately was anger, disgust that there's no great new artists. Labels aren't developing acts, nurturing them," says Elam. "Everyone wants the track already cut, the beats in place as delivered by a high-profile producer and the single chosen. Picking the fucking single is supposed to be the label's job.

"Bigger labels force artists to take a three-quarter rate on mechanicals -- the result being a tiny check or nothing at all," he continues. "We want to work fairly with each artist so that they're happy and we're happy with the money end." Though they won't quote exact figures on how much they're offering J.T. The Bigga Figga for his due-September Stocks and Bonds CD (the first Foundry release), the Clink-discovered Crushed and the Black Incorporated (formerly The Clay People), both Elam and Chackler reveal they want long-term familial relationships with their artists. "We get rich, they get rich and vice versa," says Elam. "I don't lowball artists. As a lawyer I want the most for my client. ... I want comfortable relationships with artists where they can say Œfuck you' to me; a comfort level that provokes loyalty to each other."

"That's how you make lots of records and lots of money," says Chackler. "Competitive advances. Trust between artists you've developed. Three differing philosophies of three different guys who've done three differing sides of the business. Meshing."

With The Foundry, Clink -- in tandem with partners Elam and Chackler -- seeks to take the songs and bands he's most inspired by through the dead-end landscape of big-spending, uncaring, faceless labels who more often than not hand out major deals as favors to management or drug-dealing buddies. "The business side of these labels are rarely cost-efficient because of corporate bloating. On the other side, big labels often see it as too expensive and too time-consuming to develop acts," says Clink. "That's why it's up to people with expertise on the level of The Foundry to do so. We're doing it, because the business can still make money and still be personally rewarding on a musical level."