This story was told from one author’s perspective. He was the underdog going up against an old pro. The competition was held in a stadium and as each author typed his story it was projected on a screen for the audience. Just as the protagonist feels he’s about to lose, the old pro author types “I can’t write this shit anymore” and quits.
I think this is probably "Prose Bowl" (1979) by Barry N. Malzberg and Bill Pronzini.
A summary of the story on the NESFA recursive fiction database reads:
In the future writers compete as professional athletes. In the prose bowl, two writers vie to see who will complete 10,000 words first (in four quarters of 2,500) while 100,000 paying fans look on. Rex Sackett, the young challenger picks the topic "Mid-Twentieth Century Detective" while the defending champion Leon Culp (the Cranker) gets "Futuristic Love-Adventure." In the fourth quarter, Culp finally realizes that what they are doing is garbage and he stops writing. Sackett wins but decides that Culp is right and he, too, will retire from the field.
Culp has a breakdown near the end of the tournament:
I finished page thirty-six, pulled it out blindly, and reached for another sheet of paper. Just as I brought it into the platen, Culp's machine unlocked and he hit the keys again.
But not for long.
I CAN'T WRITE THIS SHIT ANY MORE.
Lock into silence. Penalty flag.
You can read the story in the July 1979 issue of The Magazine of Fantasy & Science Fiction at the Internet Archive.