Piroe was a high-profile addition for Leeds, having lit up the Championship with his exploits in front of goal for Swansea.
As much as he appeared to be a coup for the Whites, he was a loss for Swansea as the Welsh club were parting ways with their primary source of goals.
Speaking to Wales Online, Watson has opened up on why the Dutch marksman’s move to West Yorkshire was sanctioned.
He said: “We ultimately wanted to try to keep Joel but what he wanted and what his representatives wanted wasn’t within the structure of the football club.
“We felt we couldn’t break that structure because of the knock-on effect. That was coupled with an offer that came in. We had an internal valuation and that was met and exceeded in some contingents.
“When you are getting a return on an investment, he indicated that he wasn’t going to sign a new contract and you can’t compete with a club who have parachute payments, that all came to a point where you say what do we do, we get the absolute best for the football club.
“We can get something we can then reinvest and strengthen as we go."
Swansea have endured a difficult start to the current season under new head coach Michael Duff.
They are currently the only club not based in Yorkshire sat in the bottom five of the Championship.