Well, I didn't see the administration do anything at the game in the video that was posted to YouTube, but maybe they were on the other side of the bleachers trying to do something. And Heather Ike, who took the video, will probably end up getting Constance McMillened, as her classmates seem really attached to this chant and it's going to be hard to convince them that there's something wrong with it.
The discipline with which the students were chanting, coupled with the number of them involved in the chant is enough to terrorize the gay students who might not be as confident or strong as Ike to know that the problem isn't with them, but with their classmates.
Comments on the YouTube video show that other students at the school either just don't get it or they're actively homophobic, and that they're all mad that Heather Ike showed the video to the world. High school is an awkward time where fitting in is people's biggest goal no matter their sexuality, and I'm guessing that most of the people who chanted didn't even stop to think about what the chant actually means or how other people could interpret it.
Which is why educators are supposed to step in and inform the students with more than just a few sentences over the PA. This is fundamentally why the rightwing response to homophobic bullying - punish kids for their actions if they're caught but don't criticize the beliefs that led to those actions - won't work: the entire environment condones the actions to the point that everyone will have to be suspended for participating in something that they don't really understand in the first place. Working to change that environment, which involves challenging the beliefs of the administration, the faculty, and the students, would actually make a dent in this problem.