First, I'd like to say that after seeing some arenas, they are ran very nice, chance for recovery is often given, challanges seem to adjust on the fly, and not in a way to cripple players but to provide a fair fight.
I would welcome more interaction with the crowd, but that would make it even longer and probably change the event a lot, in other words, I have no feasible ideas on how to do it.
Trier system would be very nice. I find it very hard to judge the power level of certain items. Clear information on the rules - mostly OoC ones, like what penalties should I expect if I happen to loose and how it relates to my degree of failure - would be most welcome.
What I would change is how participation/rewards are handled. Now only one character will be rewarded, and everyone can fight only once.
I know I could pay tons of money to merceneries, but I find it troublesome to grind that much gold that pays for their risk AND their opportunity cost entering the arena.
If I have a faction who would fight with me, probably the player with most influence would get rewarded. While it was nice seeing verk claiming to quit house Bhaliir on the last arena event because his fellow retainer decided to try his thing alone resulting in both of them loosing, some sort of reward for participants, an amount of consumables or really, something, would help a lot seeing less 1v1 fights.