I think we are confusing Sport specification from 20 years ago with modern M Sport branding and exploitation.
The Sport has a limited slip diff, lowered suspension, very nice Style 78 wheels and highly desirable seats.
Then you have smaller touches like illuminated gear knob and front bumper grill.
Interesting this play on words , according to the BMW build spec mine is
Type
ROADST
S719A
SPORT EDITION
Options
Vehicle information
Type
Value
VIN
Type code
CN12
Type
Z3 2.2 (EUR)
E series
E36 (7)
Series
3
Type
ROADST
Steering
RL
Doors
2
Engine
M54
Displacement
2.20
Power
125
Drive
HECK
Transmission
MECH
Colour
TITANSILBER METALLIC (354)
Upholstery
LEDER CAMELEON/SCHWARZ (V3SW)
Prod.date
2001-01-30
Options
Code
Description (interface)
Description (EPC)
S209A
Differential lock 25%
S243A
Airbag for front passenger
S263A
LA wheels with mixed tyres TYPE 42 Split Rims
S302A
Alarm system
S346
Chrome Line exterieur
S388A
Softtop, black
S395A
Rollover protection system
S423A
Floor mats velours
S428A
Warning triangle and first aid kit
S441A
Smoker package
S481A
Sports seat
S494A
Seat heating driver/passenger
S520
Fog lights
S550A
On-board computer
S669A
Radio BMW Business RDS
Code
Description (interface)
Description (EPC)
S694A
Provisions for BMW 6 CD changer
S704A
M Sports suspension
S710A
M sports steering wheel, multifunction
S719A
SPORT EDITION
Sports Edition
S785A
White direction indicator lights
L812A
ENGLAND/IRLAND AUSFUEHRUNG
NATIONAL VERSION GREAT BRITAIN
Think is when I went out with my son to look at 4 Z3's on a Saturday , we knew nothing at all about them , not even engine sizes
This was the first one we looked at ,
we only found out was lower than others when we came down to the Silverstone Classic, and found out it was a slightly different model,