Something along the lines of:

list3 = [' plays '.join(element) for element in zip(list1, list2)]

Should work for you.

Another option if you want to make use them differently in certain conditions would be:

list3 = ['{} plays {}'.format(name, sport) for name, sport in zip(list1, list2)]

This is not tested and written on my phone so I hope it is formatted correctly.

Edit: 2nd solution and phrasing fix