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As the leader is the last model you'd remove, ideally I want to give him any/all upgrades possible to keep them as long as possible. I'm looking at Dark Eldar Reavers (Arena Champion for the squad leader) but it will apply across most factions I would guess.

So the unit wording is as follows;
"For every 3 models in the unit, one Reaver may replace its........"

Does the Arena Champion count as a Reaver? He has the keyword. Can I give him the upgrades or does it have to be a base trooper who takes them?

No. The Arena Champion is an 'Arena Champion'. Only a Reaver is a 'Reaver'.

Model names are important, if it says Reaver, it means Reaver. If it said "REAVER" the keyword, then you could, but it says "Reaver" the unit name. It's one of the few things GW haven't messed up this edition (I lie, of course they have, but it's been more than not consistent on when it means a unit name vs a Keyword).

Thanks guys!