The optimism derived from a top-eight Premier League finish has waned as captain Adam Lallana, striker Rickie Lambert and talented full-back Luke Shaw have all since departed St Mary's.
Mauricio Pochettino has also left for pastures new, with Ronald Koeman taking on the manager's role in what is a period of transition for a club who, just four years ago, were in League One.
But, while Southampton may have lost some of their star players - and others, such as Dejan Lovren and Morgan Schneiderlin, could soon also be on their way - they have received a substantial financial boost from the transfer fees.
And Watson, who had a two-year spell at Southampton between 1995 and 1997, believes the club could yet turn the situation to their advantage - providing they invest the money wisely.
"I think it's a really exciting time," Watson told Perform. "I think they've got top dollar for top players. If they want to go to the next level they have to bring in players.
"They've brought in a top-class manager who has played at the very top, that's going to inspire players. I think it's really exciting.
"They're going to be raising the best part of £60 million. Who is to say that he won't bring in better players than Adam Lallana and Rickie Lambert? And they will be a lot cheaper. I think it's really exciting."
Watson conceded that the financial clout of Liverpool, who Lambert and Lallana joined, and Manchester United, who swooped for Shaw, was always going to prove too strong for and Southampton to resist.
"The amount of money that is being offered for players you've got to take it," he added. "A dip in form or anything else like that and you're stuck.
"You're always going to second guess yourself but if you get offered £25 million [you have to take it] because a year later you might only get offered, say, £15 million.
"If you can get £25 million for a player and that player wants to go then he has to go. It's as simple as that. Adam Lallana said he wanted to go, Rickie is a different matter because he's 32 and he was going home to his boyhood club.
"Luke Shaw is probably the best left-back in the country, (but) if you're going to get £30 million for an 18-year-old again you've got to take it. You might be able to go and get three players worth £7 million or £8 million and still have £6 million left over."
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