an e-sports org cant live off merch and prize pools, so they get sponsors, those sponsors appear on the team´s shirt, or even their name (just like on tsm ftx, ftx is the name of the sponsor in this case) the team joins a tourney which is broadcasted and it gets views, sponsors watch their brand/logo being shown in that tourney because their team made it far so they keep playing more time = more views, so they keep investing on that e-sports team and the org can pay their players.
now the explanation for dummies:
leo faria says 5 months off season = no tournaments
no tournaments = no views
no views = sponsors wont invest
sponsors not investing = no money for orgs
no money for orgs = no money for players
no money for players = no professional players
no professional players = tier 2 dead.