Increase your ticket prices if you are selling out your arena on a regular basis (I've been increasing prices by 20% of the starting price). Keep doing this until you max them out. Then expand your arena. The cost of expansion is such that it requires a new seat to be sold ten times over (at maximum prices) before you recoup the construction cost, so in my opinion, to expand before maxing ticket prices seems like a waste of money.
Of course, others opinions may differ and it may be worthwhile to add some luxury boxes in the meantime.