The correct option is
C are playing
Looking at the picture, we have to fill up the first blank. Note, that description or narration of photographs, movies and books (all printed work) is usually done in the simple present or present continuous tense to make the scene interesting for the readers. Also, these tenses help the readers to visualise the picture in a better way. The rule for present continuous tense is: 'is/am/are + verb(ing)'. Here, the third sentence of the paragraph is in present continuous tense, hence we must use the same tense.
Option B is the correct answer- 'In this picture, two teams are playing...' It is correct because 'are playing' is in the present continuous tense.
Option A is incorrect, as 'were playing' is past continuous tense. We can't use past tense here, as they're still playing in the picture. Also, the paragraph is in present continuous tense, hence we can't use past tense here.
Option C is incorrect, as we can't use the perfect continuous tense unless we know the whether the action has been continuing for a really long time and is unfinished. Also, the paragraph is in continuous tense, hence it won't be appropriate to use the perfect continuous tense here.
Option D is incorrect, as it is in simple past tense. If we use past tense for the first blank, the entire paragraph will become grammatically incorrect.