In Friends Season 5 Episode 4 (The One Where Phoebe hates PBS):
In one scene Joey says to Phoebe "And you know the Deal with Santa, right?"
After some time the following conversation happens between Joey and Phoebe:
Phoebe: Hey, Joey, when you said the deal with Santa Clause, you meant?
Joey: That he doesn't exist.
Phoebe: Right. (She turns and opens her eyes in shock.)
Why does Phoebe react that way? What is the deal about?