Best way is to edit

include/player.inc

and remove the lines


Code:
so.addVariable("logo","{$config["baseurl"]}/templates/images/watermark.gif");
        so.addVariable("link","{$config["watermark_url"]}");



If you delete the templates/images/watermark.gif, watermark will not show. but every access will report as 404 error in cpanel error log.