Scouts who are involved in team or individual sports competition outside of scouting can earn recognition for their efforts in the form of Sports Belt Loops and Sports Pins. Any scout can earn these awards, including Tiger Cubs. Cub Scouts can even earn a 'letter' ('C' - for Cub Scouts).
Sports Belt Loops are easier to earn and are typically available to Scouts who have met minimal standards for participation in a sport and basic knowledge of the sport.
Sports Pins have more stringent requirements.
There are no specific requirements for awarding the letter - it is intended for displaying the pins and is not applied to the Cub Scout uniform. A good rule of thumb would be to award the letter to Cub Scouts who request it only if they have earned an Academic or Sports pin.
Sports Belt Loops are designed to be worn on the blue scout belt that is part of the Wolf and Bear uniform. They do not fit on the green belt that is part of the Webelos/Boy Scout uniform.
The detailed requirements for earning sports belt loops and pins can be found in the Cub Scout Academic and Sports Program Guide or on many websites, such as this page from the U.S. Scouting Service Project - www.usscouts.org/advance/cubscout/a-s.html.