People need to play. In adults, the brain needs to be diverted from things other than the mundane problems of life in order to stay healthy, and in children, play helps spur the development of both the creative and practical systems in the brain.

Sports themselves are organized play.  In children, they teach rules and organization, as well as fostering the importance of exercise and assisting in the development of physical skills.  For adults, they allow the brain's attentions to be diverted to a very specific set of tasks.  They also serve to facilitate the physical activities which are essential to lifelong health.

Similarly, spectator sports serve important psychological and emotional needs.  From the deepest tradition of sports serving as proxies for other human conflicts (ie, war), watching sports engenders senses of loyalty and group spirit - we feel a sense of community with the other fans.

And at the very least, again when it comes to diverting the mind from life's problems, watching sports can be relaxing as well as entertaining (anyone who has spent an afternoon watching minor league baseball or admiring a golf tournament can attest to this).

I hope this all helps, CJ.  Apparently, I truly missed seeing someone remarkable while you were entertaining friends, and I look forward to hopefully seeing you when you return.

- Canis Major

I think there are several factors involved.  First, being involved in an activity with others, whether they are members of your team or members of the other team.  Competition is something that many enjoy.  Competition in amatuer sports does not have potentially devastating effects, such as competition in business.  One can feel good about giving one's best, even if winning is not the eventual outcome.  The exercise usually results in feeling healthier.  These are some of the factors.  Then, of course, most sports fans are vicarious viewers with all the feelings that incurs.  I think these are some of the reasons that sports has become such a big part of our culture.

While they might not be important to you (and me) they play a very large role in the early development in children (a turning point in my life was due to sports), mental, physical, and social interaction and behavior. There are tons of articles online, if you need help getting to a few of these - let me know by PM or email and I might tell you what my turning point is all about.