George Karl is talking to the Memphis Grizzlies

Sam Amick | USA TODAY Sports

The Denver Nuggets surprisingly parted ways with coach George Karl on Thursday, and he instantly became a hot commodity elsewhere.

According to two people with knowledge of the talks, the Memphis Grizzlies spoke with Karl almost immediately after he was let go about the possibility that he would replace Lionel Hollins and the Clippers plan to talk to him soon about their coaching vacancy.The Grizzlies were granted permission from the Nuggets on Thursday to have more formal talks with Karl, which was necessary because his severance agreement has not been finalized with Denver and he's still under contract. Ironically, the Nuggets have interest in Hollins for their vacancy and have received permission to speak with him.

Hollins' contract expires this month and it appears likely he won't return, though there is still a dialogue between both sides and a chance he comes back. The Clippers fired Vinny Del Negro last month. The people spoke to USA TODAY Sports on the condition of anonymity because of the private nature of the talks.

The Grizzlies have told Hollins that he can speak with other teams and were honing in on Memphis assistant Dave Joerger as the top candidate to replace him, but their decision to wait before making that move was tied to the chance that Karl could become available. Grizzlies vice president of basketball operations Stu Lash was with Karl in Denver and holds him in the highest regard.

Karl's contract had one year remaining, but there was a team option for next summer that would have brought him back for the following three years if that's what the Nuggets so decided. Karl clearly wanted an answer about his long-term future that Denver wasn't prepared to give, and the decision was made to divorce sooner rather than later.

Thursday, Karl tweeted: "I want to thank Nuggets fans for their support over the past 8 yrs. The karma on the street was incredible. Denver will always be home."

"It's a sad day for me, my staff and my family. Difficult decision to understand but memories with the Nuggets are the best I've ever had."

Meanwhile in Memphis, Hollins had discussions with Grizzlies management on Thursday in Memphis and a final decision about whether they want him back has not been made. Hollins had made it clear he wants to return, but the Grizzlies front-office team that was put in place this season after an ownership change continues to assess whether the fit is right.

"I believe in Memphis. I love Memphis," Hollins said in an interview with Sports 56 WHBQ in Memphis. "I never had any intention of going anywhere. I don't have any intention of going anywhere."

Denver, meanwhile, will focus on Hollins or Indiana Pacers assistant Brian Shaw as possible replacements. There are indications that Shaw is leading that race, as the Nuggets see Shaw as a rising star in the coaching ranks who could help their young team grow.

Karl won the league's Coach of the Year award after the Nuggets won a franchise-record 57 games, but Denver was upset in the first round by Golden State and the most tumultuous of offseasons ensued from there. General manager Masai Ujiri left recently to become the head personnel man in Toronto, and now Karl's nine-year run in Denver comes to an end.

As put best by Nuggets forward Kenneth Faried in his tweet not long after the news broke, "So we lost a GM (and) now a coach what's next?"

The Clippers have Shaw and Karl atop their list, but have also received permission to speak with Hollins and have an ongoing dialogue with former Clippers and Phoenix coach Alvin Gentry. Yet the person with knowledge of their search indicated that Shaw and Karl are far and away in the lead as potential coaches and interviews will likely take place with the next week.

As for Hollins' potential opportunities elsewhere, he has been considered by the Brooklyn Nets for their vacancy as well but they were denied permission by Memphis one day after the Grizzlies were swept by San Antonio in the Western Conference Finals. The Nets have yet to ask for permission again, but would be granted permission to speak with him if they did.

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