Last week the German Football Leagues (DFL) which runs the Bundesliga abandoned a planned billion-euro investment deal, which had previously been approved by the necessary two-thirds majority of clubs, due largely to fan protests resulting in long delays at matches.
Fans had littered pitches with everything from tennis balls to chocolate coins in opposition to the plan to swap a portion of the league's future media revenues for an upfront cash injection.
DFL chairman Watzke told AFP and other journalists on Tuesday that fans "in Germany have a problem with investors".
"Germans are traditional, perhaps even a bit old-fashioned.
"In Germany, investor is perhaps not the best word."
German football has a notable commitment to fan control and involvement via a "50+1" rule which restricts the degree of influence an external investor can have over a club.
The rule remains enduringly popular among German fans, many of whom value it more than domestic or international competitiveness.
The DFL had promised the new deal would include supporter-friendly protections against changes in kick-off times or moving competitive fixtures abroad.
"Our contract with the investor had clear red lines that nothing could happen which would be a problem for the fans, but the problem was that fans didn't believe us.
"It's actually a problem in German society. Every idea that you tell the public, the public says 'not good'."
Watzke said the protests did not reflect the opinion of the average fan.
"Five percent of the fans -- which is not so much, but they're the organised fans -- were against it.
"The average fans had no problem, but they did not tell anyone.
"Maybe 500 or 800 in the stadium, the organised fans, they had a clear position -- no investor."
The 64-year-old said the protests had changed the atmosphere around the deal, with clubs getting cold feet.
"As the boss of the Bundesliga, I always had the feeling that the clear majority of clubs supported it, but in the past weeks that changed.
"When I recognised that the majority was not there, then I stopped it."
Watzke said the result will hit mid-table teams the hardest, rather than those at the top of the tree.
"You can be sure that there's no problem for Bayern Munich and Borussia Dortmund.
"It's a problem for the other clubs in the league. The money from the investor would be perfect to help the whole Bundesliga grow.
"Bayern and Dortmund will make our own way if it's necessary."
Watzke is also also CEO of Bundesliga side Borussia Dortmund and he was speaking on Tuesday to announce the opening of Dortmund's first office in New York, where fellow Bundesliga heavyweights Bayern Munich have had a presence for a decade.
