Golf has been divided since the launch of LIV Golf in 2022, the Saudi-backed circuit which lured a number of top players from the established PGA Tour.
Despite a "framework agreement" on a merger announced last June, there is no sign of the tour and LIV's financiers, the Saudi Arabian Public Investment Fund (PIF), coming together.
LIV lured defending Masters champion Jon Rahm from the PGA Tour in December, in a deal reported to be worth over $400 million, and it was the Spaniard who hosted the annual Champions Dinner on Tuesday at the Augusta National clubhouse.
Watson, who won the Masters in 1977 and 1981, said he asked permission from Augusta National chairman Fred Ridley to make an intervention at the end of the dinner, which gathers former Augusta champions together.
"We all know golf is fractured with the LIV Tour and the PGA Tour doing the different things they are doing," Watson told reporters.
"I got up and I said -- I'm looking around the room and I'm seeing just a wonderful experience everybody is having. They are jovial. They are having a great time. They are laughing.
"I said, 'Ain't it good to be together again?'
"And there was kind of a pall from the joviality, and it quieted down, and then Ray Floyd got up and it was time to leave.
"In a sense, I hope that the players themselves took that to say, 'You know, we have to do something. We have to do something."
While powerbrokers from the tours and PIF along with new investors in the PGA Tour from various US sports ownership groups have yet to devise a workable unification plan, Watson said the players had power.
"We all know it's a difficult situation for professional golf right now," Watson said. "The players really kind of have control I think in a sense. What do they want to do? We'll see where it goes. We don't have the information or the answers. I don't think the PGA Tour or the LIV Tour really have an answer right now."
Watson was an honorary starter at Augusta National on Thursday along with Jack Nicklaus and Gary Player, who also addressed the media after hitting the first shots of the day.
"I think in this room, I know the three of us want to get together," Player said. "We want to get together like we were at that Champions Dinner, happy, the best players playing against each other.
"The bottom line -- that's what we want in professional golf, and right now, we don't have it."
'It's a big problem'
South African Player agreed that the split was damaging for the game.
"It's very simple. Anytime in any business whatsoever, not only in the golf business, there's confrontation, it's unhealthy," he said. "You've got to get together and come to a solution. If you cannot -- it's not good. The public don't like it and we as professionals don't like it, either.
"But it's a big problem because they paid all these guys to join the LIV Tour fortunes, beyond one's comprehension."
But Player, 88, said any deal needed to make sure players who stayed with the PGA Tour are compensated for their loyalty.
"I really believe the players, if they're loyal, should be compensated in some way or another," he said. "Otherwise, there's going to be dissension."
Nicklaus, the record 18-time major winner, said he has tried to keep out of the conflict.
"The best outcome is the best players play against each other all the time," he said. "That's what I feel about it. And how it's going, I don't know. I don't want to be privy to it."
Nicklaus said he had spoken to PGA Tour commissioner Jay Monahan and was reassured the tour was "doing fine" but Nicklaus told him he didn't want details.
"If Jay thinks we're doing fine, we'll get there," he said. "I certainly hope that happens, the sooner the better."
