For example, how about a fight on platforms that,on a time, drop and fall into spikes so you have to pay attention. Or an artificial Naval battle in which there are 2 teams each on a ship and the arena is flooded and whichever team loses all members first loses.
Like I said this may have been mentioned before but I genuinely think it was a great addition to Oblivion and would be better in SKyrim with the new combat system and more variety to battles.
Possibly have personal quests for arena participants like the quest to find out the Orc Grand Champion's origins?
What do you guys think?