Leading up to the inter-house athletics carnival at school, we do everything in the house colors. (red or blue at our small school) We have red & blue collage, play dough, paper made stuffed balloons, pens, paper etc. We make streamers, decorations and flags for their houses. The kids love it & really get into the team spirit.
During our Sport Unit, we pick a day where all the children (and teachers) wear a shirt representing their favorite team.
During Sport Week, we pick a mascot and team colors to use for decorating the room and other art activities.
For our sports theme I decorated the bathroom as the locker room and our 2 and 3 year olds loved it. All I did was painted lockers on butcher paper and had some lockers open revealing different kinds of sports equipment. I like to decorate first to get the theme going. Our classroom was the Sports Center, we had something representing about 10 different sports. We even took the kids pictures and made a cheerleader poster, team players poster and umpire/referee poster. The children love to see their faces and the parents love the captions.