BVB will face their former midfielder in Saturday's Champions League final.
Watzke said: "I always advised Jude that, if he was convinced that he wanted to go to another club, he should consider going to Real Madrid. And he listened to me. In the end it is the biggest club in the world. It's been many years and I know them all.
"Florentino is the boss, but there is also Jos ngel Snchez, with whom I have a friendship. Just to name an example.
"If it had been only 103 million (euros) we would have negotiated badly. But no, it is no consolation because players like Jude or Erling not only left a football mark in Dortmund. They are two kids that we really appreciate here. There is no money to compensate for it. Of course, since you have to let them go, let it be for the largest amount possible.
"It was much more (than 103m)."