ISTM that ultimately and ideally, we could take sex and gender out of this equation altogether by just directly measuring the characteristics that we’re currently using sex/gender as an inexact proxy for. The technology of sports science, biomechanics etc., has advanced so far in recent years that such direct measurement is looking more plausible all the time.
For instance, instead of having men’s and women’s varsity and JV teams, we might have four teams labeled, I don’t know, D, C, B and A, categorized by something called, say, a Physical Prowess Score. If you want to play a particular sport seriously, you get measured for your height, weight, muscle mass, strength, speed, flexibility, whatever qualities give you a physical advantage in that sport, irrespective of your talent or training level in that sport.
The people with the highest Physical Prowess Score levels—biggest, strongest, fastest, etc.—will overwhelmingly be cisgender men, with maybe an occasional transgender woman or transgender man, and perhaps once in a blue moon a very big/strong cisgender woman. Those people qualify to try out for the D team, but not for any of the other teams.
The people in the next lower Physical Prowess Score category can try out for the C team, and the next lower scorers for the B team, while the people who are the smallest/weakest of all are assigned to the A team tryout pool. The A pool will overwhelmingly, but perhaps not exclusively, be cisgender women.
Then when it comes to the actual team tryouts, exceptional sport-specific talent or skill can qualify you to compete at a higher Physical Prowess Score team level, but lack of skill doesn’t entitle you to play at a lower PPS level.
So on each of the teams, nobody’s getting a grossly disparate advantage based on sheer superior Physical Prowess, although a few exceptionally talented players can use their outstanding ability to compete at a higher PPS level despite their inferior Physical Prowess.
And at the same time, nobody’s getting barred from sports competition merely based on their biological sex or gender identity. Sex and gender aren’t even explicit criteria for competition categories any more: it’s all about your actual Physical Prowess capacity.
Yes, this means that some people with high Physical Prowess Score levels but low sport-specific ability won’t make the D team—because they’ll be outcompeted by other big/strong players—and won’t be allowed to play on any of the other teams—because they’re too big/strong to qualify. That seems reasonable, though: official sports competition is supposed to be about excelling at the play of the game, not just about being the biggest/strongest hulk on the field. (And perhaps we’d end up with five or six PPS-level team categories instead of four, if we need to accommodate larger numbers of competitive athletes.)
If you don’t make the official team at your PPS level due to lack of skill, you can avail yourself of club and intramural team opportunities, just as unskilled but enthusiastic athletes do already. We can continue to use the same sorts of rules we have now for club/intramural teams to balance out significant discrepancies in physical prowess among players.
If you get a growth spurt or bulk up between seasons, you get re-tested for your PPS. And perhaps you go up a PPS level and have to try out for the higher-prowess team, just as athletes nowadays age out of their initial age categories for competition and have to compete against older players.
Boy, girl, cis, trans, it doesn’t matter any more on an individual level (although in the aggregate, as I said, the biggest/strongest players will still be overwhelmingly cisgender male and the smallest/weakest ones overwhelmingly cisgender female). At the individual level, it’s just about your personal size/strength/speed/physical prowess to determine what category/ies you’re allowed to compete in. And then it’s about your talent and guts and hard work to determine whether you’re good enough to make the team in that category.