Scorecard; Points Table
Watson, who was in top form during the recently concluded ICC World Twenty20 2012 in Sri Lanka, continued in same fashion as he two wickets and scored 47 runs.
With this, Sydney have completed a hat-trick of victories in this edition of Champions League.
Chasing 138, Sydney achieved the target in 19 overs, reaching 141/5.
Watson made a 38-ball 47 with four fours and three sixes. He and Michael Lumb put on 60 runs for the first wicket in 8.3 overs.
In the middle order, captain and wicketkeeper Brad Haddin contributed 32 runs off 21 balls with one four and three sixes.
Earlier, Lions were off to a fine start but faltered in between to end up with 137/9 in 20 overs. Opener Gulam Bodi top scored with 61.
Left-arm seamer Mitchell Starc was the pick of the bowlers with figures of 3/19 in four overs.