The Bucs are a "file-and-trial" organization, so they ceased negotiating a one-year deal last month and went to a hearing. The three-person arbitration panel ruled in favor of the club.
Watson, 31, took a slight step backward after three straight years as one of baseball's best setup relievers. The left-hander posted a 3.06 ERA -- 37 percent better than league average when adjusting for ballparks -- in 67 2/3 innings over 70 appearances, his fifth straight season of at least 67 outings.
In late July, Watson took over the closer role after the Pirates traded Mark Melancon to the Nationals.