Sounds like he is doing fine and is doing something constructive with his time.

I did this most of my childhood, except I would read until 2am or much later. I was very active in sports as well. Staying up past midnight would kill me the next day, sometimes. I think setting a limit of 7-8 hours of sleep a night should be sufficient. When he gets into harder classes and college, the habit he has of staying up late will serve him well.