In conversation, this seems like a good thing to say during an uncomfortable silence. It's basically making fun of the fact that everyone is uncomfortable and no one really knows what to say to keep things going. It'll probably make everybody chuckle a little and loosen up.

Here's an example featuring You and Generic Persons 1-4:
Generic Person 3: ...
Generic Person 1: ...
Generic Person 4: ...
      (uncomfortable silence)
You: ... ... So, how about that local sports team? (then smile)
Generic Persons 2 & 4: Heh. Funny.
Generic Person 3: Ha.
Generic Person 1: ... Which team would that be? I don't keep up on sports much.
You: I'm kidding. There's not really a sports team.
Generic Person 1: I used to play on a sports team.
You: No, what I mean is I'm not referring to a particular team or sport or anything. It's a joke. Get it?
Generic Person 1: ...No...
Generic Persons 2-4: Generic Person 1, you're such an idiot.
Generic Person 1: (whimper) ... (runs away crying to self)
You: ...
Generic Person 3: ...
Generic Person 4: ...
Generic Person 2: So, how about that local sports team?

For variations on the same, see "how about them lakers?" and "So how 'bout them yankees?".

Around the Johns Hopkins University's undergraduate campus (and therefore probably elsewhere as well), this is used as a device to change the subject. Usually, as opposed to the situation described above, this is when several people are talking and personal details are being divulged (or about to be divulged) regarding one of the participants in the conversation.

A further colloquial use is also seen in the area, where an entire conversation about nothing will occur.

A typical dialog goes:

Person 1: (to Person 3) How did that date go last night?
Person 2: (to Person 3) Yeah, we've been wondering all day!
Person 3: (Nervously) How about that local sports team?
Person 4: (instinctively trained from over-exposure to the "sports team" conversation) Yes, they recently had a win/loss against their cross-town rival.
Person 3: They're doing a lot better this season than the other season before they acquired that new player.
Person 4: Definitely. And that play by insert new player here in a recent game was definitely impressive.
Person 1: Okay, okay, I give up.

Note: Terms like "win/loss" and "insert new player here" are spoken directly as written, e.g. "win slash loss".

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