Arousal is the level of activation and alertness experienced by a performer. For example, a judo player may feel highly aroused the moments before a bout and much less aroused an hour after the contest has ended.
The 'inverted U' theory proposes that sporting performance improves as arousal levels increase but that there is a threshold point. Any increase in arousal beyond the threshold point will worsen performance.
At low arousal levels, performance quality is low. This is described as under-arousal or boredom and might be experienced by an elite tennis player playing a lowly ranked opponent.
At medium arousal levels, sporting performance peaks. This can be described as optimal arousal and might be experienced when a boxer gets themselves in the right 'zone' to perform at their best.
At high arousal levels, performance quality deteriorates. This can be described as panic and might explain why a football player performs very poorly when their team is losing 3-0.
Sometimes arousal levels need to be changed within the same performance. A fly-half in rugby needs higher arousal when making a big hit compared to when they take a penalty kick when calmness would be beneficial.