Sprite not transparent

Click on the Edit Sprite button, then double-click on the sprite thumbnail to open the Editor.

Zoom in on the person.

Then use the eye dropper tool to click on part of the picture that has a color for the background.

Now paint in with the Paint Bucket tool in the areas around the character. Click on the checkmark to save.

Click on the checkmark again to exit. Now you can see the sprite does have a transparent background.