Funny people watching the match not half entertaining us (7)
I believe the answer is:
suspect
'funny' is the definition.
(I know that funny can be written as suspect)
'people watching the match not half entertaining us' is the wordplay.
'people watching the match' becomes 'spectators' (eg spectators at a football match).
'not half' means to take half the letters.
'entertaining' means one lot of letters goes inside another.
'spectators' with half the letters taken is 'spect'.
'spect' placed around 'us' is 'SUSPECT'.
(Other definitions for suspect that I've seen before include "Doubt; mistrust" , "Believe (something) possible or probable" , "Doubt - man being questioned by police" , "Funny" , "Have misgivings about" .)