This paper proposes a blind audio watermark extraction technique that allows performing watermark decoding while installing data synchronization. The proposed decoding algorithm employs correlation techniques supported by a wavelet denoising process, thus improves the decoding performance significantly. A data adaptive nonlinear MPEG Layer 1 Model 1 compatible watermark encoder is designed for watermark embedding. A channel encoder is also included into the system to take the advantage of error correction. The method does not require the original audio for decoding and it is robust to channel noise, filtering as well as stereo-to-mono conversions. It allows working at very low watermark-to-signal ratios thus preserves inaudibility.