This distinction between high-level and grassroots is also reflected in the Treaty for the Functioning of the EU. From an economics perspective, the articles on competition dominate the Treaty. The more important articles for Antitrust or Competition Law start at Article 101. It deals with anti-competitive agreements. In the EU, high-level sport is subject to Competition Law (a situation that is worth comparing with the US). Government interaction with high-level sport is also subject to Competition Law. Article 107 deals with State Aid. It constrains government funding (by whatever means) where it gives unfair advantage. Virtually all economists are happy on this terrain where the market delivers and the government is constrained.
It gets a bit trickier for economists when it comes to government funding of grassroots sport. Case law, and clarifications to Article 107, suggest that government funding should be directed to inclusive social projects. This is in line with the Amsterdam Declaration on Sport - a "declaration of the European Council on the specific characteristics of sport and its social function in Europe". There is more than a suggestion that the market under delivers. It is the world of market failures and government solutions. It is my contention that many economists are less comfortable on this terrain. They have the theoretical concepts, e.g. public goods, merit goods, and goods with positive externalities. But, there is a lack of conviction - that some say is linked to a lack of empirical evidence. (I will explore this argument in a forthcoming edited volume by Robbie Butler.)
The EU distinction between high-level sport and grassroots sport is not perfect but it does offer a useful framework to think about the role of government funding in sport.