I see no reason why people can't just have sports teams, music groups and any other kinds of endeavors, without government help.
I mean, does anyone need a grant to do any of this stuff?
Better. It should not be the responsibility of government to throw money around to sporting groups or arts groups.
Sport gets enough money put into it from private company sponsorship or community-based funding as it is.
I am afraid that fundamentally the issue can be boiled down to economics and culture.
Culturally (especially in sport-loving countries like Australia and the US) "The Arts" are not very popular while sport gets a lot of attention.
Economically...well sport pays - this could be linked to culture from the whole supply-and-demand side of things.
A side note:
What is also great observation about what is wrong with society is that the US and Australia are countries mad about sports but have some of the highest rates of obesity and overweight people in the world.
Maybe it shows something about how much sport is watched rather than participated in by the general community in this country.