To a point, but in general, I disagree. In this game, you need a lot of money and enough weekly finances to compete and make a run at the top league in the USA.
If you don't have an adequately sized arena, you won't have that potential. It limits the salary your roster can hold. So unless you're going to build a full team of uniquely talented, salary-efficient players that will take 7-10 seasons on 3 guys, you will have a hard time financing the salaries.
It's all about being able to have an arena size adequate enough to finance a division winning team at the next league in the promotion line. It would be interesting for someone to run an actual economic analysis on this. Obviously, different leagues have different thresholds, and salaries don't fully encompass talent, but I would be willing to bet there is a significant relationship there.